Session 9

Question 1

What are the 4 stages of the economic cycle?

Answer 1

1. Expansion
   2.Prosperity
2. Contraction
3. Recession

Question 2

What are the six steps of budgeting?

Answer 2

1. Determining financial results
2. Analysis of the financial statements
3. Normalizing the revenue and expenses
4. Budgeting revenue
5. Budgeting expenses
6. Combining budgeted revenue and expense and making adjustments

Question 3

What are the 4 ways to organize expense categories?

Answer 3

1. Personnel Expenses
2. Variable Expenses/Cost of Goods Sold
3. Occupancy/Facility Expenses
4. Fixed/Administrative Expenses

Question 4

What is the % of gross if the gross revenue is $1,250,000 and the expense is $87,365?

Answer 4

%6.9 (expense/Gross Revenue)

Question 5

Patient volume is considered a ____ _____ of revenue growth.

Answer 5

Key Driver

Question 6

A simple method of creating an expense budget is to add what to the base expense figure?

Answer 6

The last three years average growth rate

Question 7

What is the difference between the Client Credit Policy and the Charge Account Policy?

Answer 7

a. Client Credit Policy-establishes the pre-qualifications necessary to open a charge account. Example client may need a minimum of 2 years of perfect payment history without a problem.
A charge account policy-establishes credit limits, payment due dates, payment methods and invoicing procedures.

Question 8

The fee schedule should be reviewed minimally ____a year.

Answer 8

Once

Question 9

What percent of gross revenue is said to be lost to embezzlement in small businesses annually?

Answer 9

a.>%5

Question 10

What is the most often used chart of accounts?

Answer 10

AAHA

Question 11

Why is a Petty Cash system suggested over using cash from the reception drawer for smaller purchases?

Answer 11

Improves internal controls by providing a system for tracking cash purchases

Question 12

Expansion, prosperity, contraction & recession are the four stages of?
a. The budget Process
b. The business cycle
c. Exit strategy awareness
d. Business valuation timing

Answer 12

b. The business cycle

Question 13

What are two ways of normalizing revenue and expenses when creating a budget? (multiple choice)
a. Remove any non-recurring items from the previous year
b. Combine the last 3 years as an average
c. Combine annual budget totals and divide by 12 to normalize anticipated monthly expenses

Answer 13

a. Remove any non-recurring items from the previous year
b, Combine the last 3 years as an average

Question 14

Which metrics below are important considerations when creating a budget? (multiple choice)
a. Last three years Profit and loss and productivity statements
b. All lease and loan documents
c. Fee schedule
d. List of operational changes expected in the next few years and their potential effect on revenue and/or expenses (new services, expansion, etc.).
e. List of all major capital

Answer 14

all metrics listed are important considerations

Question 15

In regards to creating a Credit Policy; what are the two sub policies that you should begin with? (Multiple Choice)?
a. Client Credit Policy
b. Client Charge Policy
c. Veterinary Cost per minute
d. Fixed cost per minute

Answer 15

a. Client Credit Policy
b. Client Charge policy

Question 16

What elements should be included in the Charge Account Policy for the practice (Multiple Choice)?
a. The pre-qualification procedures for a client of unknown standing
b. The process for flagging a pre-qualified client in your practice management system
c. Acceptable forms of payment as well as storage of credit card numbers to be used as a backup guarantee the client agrees to at signing.
d. Total invoice amount a client can charge without additional approval of management/ownership

Answer 16

a. The pre-qualification procedures for a client of unknown standing
b. The process for flagging a pre-qualified client in your practice management system.
d. Total invoice amount a client can charge without additional approval of management/ownership

Question 17

A list of procedures to use when considering ways of extending credit to clients includes creating ranges of available credit amounts based on the clients longevity with the practice.
a. True
b. False

Answer 17

b. False

Question 18

What is the Consumer Price Index?
a. A list of index of prices used to measure the change in the cost of basic goods and services
b. An index report of goods and services used to track consumer spending trends for purposed of determining price points in business
c. An index of consumable goods created by the Bureau of Labor Statistics that helps establish economic trends in business

Answer 18

a. A list or index of prices used to measure the change in the cost of basic goods and services

Question 19

The consumer Price Index can be instrumental in determining the cost of living increase for a variety of expenses associated with running a veterinary practice.

a. True
b. False

Answer 19

a. True

Question 20

In relation to Fee Analysis which of the following elements should be included in the calculation (multiple choice)?
a. Variable cost per minute
b. Staff cost per minute
c. Veterinary cost per minute
d. Fixed cost per minute

Answer 20

b. Staff cost per minute
c. Veterinary cost per minute
d. Fixed cost per minute

Question 21

Marsha Heinke DVM states _____% of practices have been victims of fraud or embezzlement.
a. %80
b. %67.8
c. %49.8

Answer 21

b. %67.8

Question 22

It is recommended that practices do not prosecute confirmed cases of embezzlement unless the loss is determined to be greater than $2000.

a. True
b. False

Answer 22

b. False

Question 23

What entity may be a good resource for the practice in the event embezzlement is suspected?
a. The Federal Trade Commission
b. Your Insurance Carrier
c. Business Protection Agency
d. All of the above

Answer 23

b. Your Insurance Carrier.