Section 5 Flashcards
Reconcile
Reconciliation is an accounting process used to compare two sets of Records to ensure that figures are in agreement and are accurate. It is the key process used to determine whether the money leaving an account matches the amount spent.
Journal
A bookkeeping term that describes the document in which business transactions are originally recorded as they occur. The book of the entry prior to The Ledger.
Receipts
A written acknowledgment that something of value has been transferred from one party to another.
Debt
A Duty or obligation to pay money, deliver goods, or render Services under an Express or implied agreement.
Depreciation
The process of allocating the cost of an asset across the time period for which it provides benefit, (known as the assets depreciable or useful life)
Differential pay
A compensating differential, which is also called a compensating wage differential or an equalizing difference, and is defined as the additional amount of income that a given employee must be offered in order to motivate them to accept a given undesirable
Dunning letters
A notification sent to a customer, stating that the customer is overdue in paying and accounts receivable to the sender
Embezzlement
The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.
Equity
The owner’s claim on the practice’s assets
Experience rating
A system used by insurance companies in the US to set the premium to be paid by the insured on the basis of risk to the company providing the insurance
Expenses
Measured outflow of services and/or Goods, matched to the revenue generated for the outflow.
Fixed expense/ cost
A cost that does not change with an increase or decrease in the amount of goods or services produced.
Flexible/variable expenses
Costs that may be manipulated in an amount, or eliminated by not engaging in the activity that incurred the expense.
General ledger
The collection of all assets, liability, equity, revenue, and expense accounts from which the financial statements are derived.
Generally accepted accounting principles (GAAP)
A framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded US corporations.
Gross domestic product (GDP)
The total value of goods produced and services provided in a country during one year
Cost of living (COL)
Theoretical price index that measures relative cost of living over time or regions. It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as prices vary.
Profit
A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
Profit and loss( p&l or p/l)
Summary of the practices income, expenses, and resulting profit or loss for a specific period.
Pro-forma budget
A protection or estimate of what may result in the future, given current assumptions or predictions.
Interest rate
Typically noted on an annual basis, known as the annual percentage rate(APR)
Internal auditing controls
Processes in place to provide management reasonable assurance that no practice resources are being lost, that financial reporting is reasonably accurate, and that profitability targets are achieved.
Limited liability company(LLC) (US)
Is organized under state law and usually governed by a written operating agreement. LLCs have several benefits including tax benefits and protection from personal liability.
Liabilities
The practice’s debts
Leasehold improvements
Enhancements paid for by a tenant to at leased space
Key performance indicator( kpi)
Also called key success indicator, a term used for any metric or measurement that is deemed important to monitor for the evaluation of the practice’s success in meeting objectives and goals.
Liquid assets
Assets that can be converted into Cash quickly and with minimal impact to the price received.
No-Lo practice
A Veterinary practice with little, to no profitability.
Operating income
Revenues or income resolving from Veterinary activities and Veterinary related sales, such as Pharmacy sales. Does not include non-veterinary related income such as interest income.
Ownership equity
The portion of a business is equity which remains for the owners after all liabilities have been paid and all other creditors have been reimbursed.
Paid time off(PTO)
An employee benefit that provides a bank of hours in which the employer pools sick days, vacation days, and personal days allowing employees to use as they need or desire.
Payroll tax
Imposed on employers or employees and are usually calculated as a percentage of the salaries that employers pay their staff.
Practice management software
A category of healthcare software that deals with day-to-day operations of a Veterinary practice
Rent
A tenants regular payment to a landlord for the use of property or land
Return on investment (ROI)
A measure of probability used to refer to a single project and expressed as a ratio. Formula = revenue generated divided by the cost of assets consumed for the project.
Revenue
All sales of the practice for goods and services
Salary compression
When employees in lower-level jobs are paid almost as much as their colleagues in higher-level jobs, including managerial positions
Sales tax
A tax on sales or on the receipts from sales
Shareholder’s equity
A practice’s total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus Treasury shares. Shareholder’s Equity represents the amount by which a practice is financed through common and preferred shares
Statement reconciliation
A form that allows individuals to compare their personal bank account records to the bank’s records of the individual’s account balance in order to uncover any possible discrepancies.
Stock
The goods or merchandise kept on the premises of a Veterinary practice that are available for sale or distribution
Succession planning
A process for identifying and developing internal people with the potential to fill key business leadership positions in the practice. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles
Transaction
An instance of buying or selling something; a financial transaction
Unemployment taxes (US)
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated
Use tax
A sales tax on purchases made outside one’s state of residence on taxable items that will be used, stored or consumed in one’s state of residence and on which no tax was collected in the state of purchase.
Inflation rate
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling
Incorporated
Formed into legal Corporation
Income tax
Text levied by a government directly on income, especially an annual tax on personal income.
Income statement
Also known as the profit and loss statement, a report on financial performance that covers a period of time and reports income and expenses during that period.
Income
A gain or recurrent benefit, usually measured in money
Imprest account
A fund or cash Reserve that is maintained at a constant level for lengthy periods of time
Historical data
Past periods data, usually used as a basis for forecasting future trends
Bank statement
Summary of financial transactions which have occurred over a given period on a bank account
Balance sheet
Also referred to as the “statement of financial conditions”, the balance sheet summarizes the assets, liabilities, and owner’s equity at a particular date
Benchmark
Measurable quantities for a given period of time that are considered industry standards
Budget
A financial projection used to estimate and control the results of future business operations
