Debts incurred and not yet paid.
Amounts owed to the physician.
Accounts receivable trial balance
A method of determining that the journal and the ledger are in balance.
Accrual basis of accounting
Method of accounting in which income is recorded when earned and expenses are recorded when incurred.
The entire property of a person, association, corporation, or estate applicable or subject to the payment of debts.
A financial statement for a specific date that shows the total assets, liabilities, and capital of the business.
The recording of business and accounting transactions.
Cash basis of accounting
A method of accounting in which income is recorded when received and expenses are recorded when paid.
Cash flow statement
A financial summary for a specific period that shows the beginning balance on hand, the receipts and disbursements during the period, and the balance on hand at the end of the period.
A standard of comparison to make sure answers obtained are accurate.
A summary of accounts paid out.
A record or notation of an occurrence, transaction, or proceeding.
The monetary value of a property or of an interest in a property in excess of claims or leins against it.
The state in which the total ending balances of patient ledgers equals the tatal of accounts receivable.
A paper describing a purchase and the amount due.
Things that are owed; debts.
Petty cash fund
A fund maintained to pay small, unpredictable cash expenditures.
A request for payment.
Statement of income and expense
A summary of all income and expenses for a given period.
Supporting other documents or records.
A method of checking the accuracy of accounts.
An accounting period of 12 months during which a company determines earnings and profit; the fiscal year does not neccessarily begin in January; the business determines the beginnging of its fiscal year.
The cardinal rules of Bookkeeping
(1) Use good penmanship, (2) Use the same pen style and type of ink consistently, (3) Keep columns of figures straight, (4) Write well-formed figures, (5) Carry decimal points correctly.
Enter all charges and receipts immediately in the daily record or journal. Post all cahrges and receipts to the patient ledger daily. Do not erase, write over, or blot out figures.
Kinds of Financial records
Daily journal and checkbook
is the chronological record of the practice.
Receipts usually are deposited in the ckecking account, and a record of the deposit is entered in the journal and on the check register.
usually consists of a section at the bottom of each day sheet and a check register page at the end of each month, plus monthly and annual summaries.
Disbursement journals must show
- Every amount paid out.
- Date and check number.
- Purpose of the payment.
amount sufficient for the petty cash fund.
$25 to $50
recording, classifing, summarizing, and interpreting financial statemends.
Common accounting systems
a single-entry or double-entry system
is very basic and usually is used in small business. They are inexpensive, easy to us, and require lettle training.
Single-entry systems require
the general journal, the cash payment journal, and the accounts receivable ledger.
is a record where transactions are entered.
Cash payment journal
is a record that is used to make payments.
Accounts receivable ledger
provides information about the amounts owed to the physician.
Three types of accounting systems
single-entry system, double-entry system, and pegboard (write-it-once) system
The most complete accounting system. System in which transactions may be entered manually or by computer. Inexpensive but requires a trained, experienced bookkeeper or the regular services of an accountant.
Double-entry system accounting equation:
Assets = Liabilities + Proprietorship (Capital)
should be done once a month after all posting has been completed and before the monthly statements are prepared. The purpose of process is to disclose any discrepancies between the journal and the ledger.
Disbursements are distributed to
Auto expenses, dues and meetings, equipment, insurance, medical supplies, office expenses, printing, postage and, stationary, rent and maintenance, salaries, taxes and licenses, travel and entertainment, utilities, miscellaneous, personal withdrawals.
Financial summaries are compiled
monthly and annually
Common summary reports include
Statement of income and expense, cash flow statement, trial balance, accounts receivable balance and aging analysis, balance sheet.
All records of employment taxes must be kept for at least
Government regulations require the withholding of taxes from employees and payment of certain taxes by both
employees and employers
All records of employment taxes should be available for review by the
Employment records include
Social security number of the employee
Number of withholding allowances claimed
Amount of gross salary
All deductions for the Social Security and Medicare taxes; federal, state, and city or other subdivision withholding taxes; state disability insurance; and state unemployment tax, where applicable.
Each employee and employer must have a
Tax identification number
Any person who does not have a Social Security number should apply for one using
Employee's Withholding Allowance Certificate
Before the end of the first pay period, the employee should complete a
The amount of taxes to withheld is based on
Total earnings of the employee
Number of withholding allowances claimed
Marital status of the employee
Length of the pay period involved
Declaration of Estimated Tax for Individuals
Federal Insurance Contributions Act
FICA provides for
a federal system of old age, survivors, disability, and hospital insurance. Rate is 6.2 % for employees and employers.
All wages are subject to the Medicare tax at a rate of ___% each for both employees and employers.
Form W-2 and Form W-3
The Wage and Tax Statement. Employer is required to furnish two copies to each employee from whom income tax or Social Security tax has been withheld.
The Transmittal of Income and Tax Statement. Employers must file form annualy to transmit wage and income tax withheld statements (Form W-2) to the Social Security Administration.
Federal Unemployment Tax Act
An annual FUTA return must be filed on ____ on or before January 31 followng the close of the calander year for which the tax is due.
The best way to begin a budget is to look at the expenses from the
categories considered for the physician's operating budget
Advertising and promotions
Legal and accounting
Salaries and wages
Dues, subscriptions, and fees
Repairs and maintenance
Medication and pharmacy expenses