Finance Flashcards
(267 cards)
1
Q
The process of identifying, measuring, and communicating economic information, often in the form of professionally prescribed and standardized reports, to permit informed judgments and decisions by users of the information, such as practice owners and managers.
A
Accounting
2
Q
Bills and vendor liabilities due for payment by the practice as part of the normal course of practice activity; money the practice owes to regular business creditors and practice vendors, and generally accruing from the previous month of supply and service purchases. These accounts may be aged over longer periods depending on vendor contracts and practice ability to meet its debts as they come due.
A
Accounts payable
3
Q
Debts owed to the veterinary practice, usually from client sales on credit.
A
Accounts receivable
4
Q
An expense incurred during an accounting period for which payment is postponed to a later period, or revenue earned during an accounting period for which cash is received in a later period.
A
Accrual
5
Q
The accounting method based on recognition of a transaction’s occurrence. The method recognizes revenue as income in the period in which it is earned because a transaction occurred (provision of service), regardless of when the client pays. Recognizes expenditures in the period in which the liability for paying them is incurred, regardless of when payment is made.
A
Accrual basis accounting
6
Q
To increase gradually, to accumulate, to have due after a period of time.
A
Accrue
7
Q
A report that segregates amounts owed to vendors into increments of 30-day periods, based on the number of days from the inception of the practice debt to the date of the report.
A
Aging accounts payable report
8
Q
A report that segregates amounts owed from clients into increments of 30-day periods, based on the number of days from the inception of the client debt to the date of the report.
A
Aging accounts receivable report
9
Q
Things of value owned by a business enterprise, such as cash, accounts receivable, and equipment.
A
Assets
10
Q
An examination or verification of financial records or accounts by a qualified professional.
A
Audit
11
Q
A record of financial transactions from which an accountant can reconstruct the sequence of events.
A
Audit trail
12
Q
An electronic network for processing financial transactions, such as direct deposit payroll and vendor payments.
A
Automated Clearing House (ACH)
13
Q
Also referred to as the statement of financial condition, summarizes the assets, liabilities, and owner’s equity at a particular date.
A
Balance sheet
14
Q
A charge added to a bill sent to a client to compensate the veterinary practice for the costs of billing when the usual practice policy requires payment at time of services. Full, advance disclosure of billing charges is generally legally required.
A
Billing charge
15
Q
The systematic recording of a practice’s financial transactions, including sales, purchases, deposits, and payments.
A
Bookkeeping
16
Q
In regard to bookkeeping and internal control processes, the act of indelibly marking or otherwise defacing documentation so that is invalidated for reuse. For example, marking a vendor invoice with a “paid” rubber stamp shows that the invoice should not be paid again.
A
Cancel
17
Q
Electronic equipment used to read the magnetic strips on credit and debit cards and transmit the transaction information to the financial institution for credit authorization and approval.
A
Card swipe terminal
18
Q
A company that provides a dedicated health-care credit card to be used specifically for veterinary services; recommended by AAHA.
A
CareCredit®
19
Q
An accounting method that measures income when cash is received and expenses when cash is spent.
A
Cash basis accounting
20
Q
A list of the names of the financial accounts a practice uses to record, organize, sort, and report transactions, usually including numeric coding. The list organizes accounts in order of their permanence and appearance in the financial statements: asset accounts, liability accounts, equity accounts, operating revenue accounts, operating expense accounts, nonoperating revenues and gains, and nonoperating expenses and losses.
A
Chart of accounts
21
Q
A company that helps manage the risk of accepting client payment by check by validating checks presented to the practice and/or using extensive data analytic predictions to statistically assess the level of risk associated with checks, and sometimes including check guarantee protection
A
Check verification service
22
Q
The average amount of money charged to a client for a single invoice. Compared to the average patient dollar transaction, which refers to the average amount charged per invoice attributable to single patient, average client dollar transactions are often higher because several animals may be invoiced through a single client bill.
A
Client transaction charge (or average client transaction charge)
23
Q
A standardized, CPA-prepared financial report that presents transactional information provided by management in a prescribed format. A compilation is the representation of management, not of the CPA, and is the most common type of financial statement presentation prepared by CPAs for veterinary businesses. Accounting profession guidelines and rules dictate protocols and presentation requirements for CPA-prepared compilations.
A
Compilation
24
Q
The direct patient costs associated with producing veterinary service and related revenues.
A
Cost of professional services (COPS)
25
A cost accounting method in which cost of a product or service is determined by allocating to it the variable (direct) costs attributed to it.
Direct costing
26
A bookkeeping record that chronologically records expenditures made.
Disbursement journal
27
Rights or claims to the properties or assets of the veterinary practice.
Equity
28
Systems and protocols for ensuring the management and protection of monetary and investment aspects of the veterinary practice. These controls are framed by the protocols, policies, and activities that ensure that the practice’s accounting system is strong and intact.
Financial control
29
A type of business report that presents financial information about the economic impact on the entity of completed transactions and other events.
Financial statement
30
Tangible assets of a durable nature, which are expected to help generate revenue over a period of a year or longer.
Fixed asset
31
An expense that tends to remain constant in monetary amount, regardless of variations in the volume of activity.
Fixed cost (or fixed expense)
32
A fixed fee for services rendered, as opposed to charging by the hour or based on a percentage of the service.
Flat fee
33
The complete and permanent chronological record of all of a practice’s transactions, organized by financial accounts, that summarizes other supporting journals, such as those listing details of sales, cash receipts, and cash disbursements.
General ledger
34
For a specific item, the difference between revenue realized by and the cost of selling a product (like dog food or a drug).
Gross profit
35
The veterinary practice’s total operating income, before any deductions for discounts, account write-offs, or operating expenses, and without adding other sources of cash, such as consumer sales tax collections and nonoperating income.
Gross revenue
36
An adjective describing a fund or cash reserve that is maintained at a constant level for lengthy periods of time.
Imprest
37
A gain or recurrent benefit, usually measured in money, that derives from capital or labor.
Income
38
A bookkeeping record that chronologically records transactions related to sales and other sources of revenues, such as rent and interest.
Income journal
39
A type of financial report that presents the total income earned and expenditures made for a specific period of time. When income for the period exceeds expenses, a profit occurs. When expenses exceed income for the period measured, a loss occurs. The period of time can span one day, one month, one calendar or fiscal quarter, a full year, or another time frame that gives management the information it wishes to examine.
Income statement
40
Law passed by the U.S. Congress and subsequent regulations created under that law and through which the Internal Revenue Service functions with regard to taxation of individuals and businesses.
Internal Revenue Code (IRC)
41
“Commercial trade, business, movement of goods or money, or transportation from one state to another, regulated by the federal government according to powers spelled out in Article I of the Constitution,”
Interstate commerce
42
Present obligations resulting from past transactions that require the practice to pay money, provide goods, or perform services in the future.
Liabilities
43
A branch of economics that examines aggregate market perspectives (regional, national, and global) of production, distribution, and consumption of goods and services, and upon which models and forecasts are developed to assist in policy and business strategy formation and evaluation.
Macroeconomics
44
The current mandatory depreciation method required by U.S. federal regulation for most tangible depreciable property (equipment, furniture, signs, computer hardware, buildings, and improvements) placed in service after December 31, 1986.
Modified Accelerated Cost Recovery System (MACRS)
45
A bookkeeping system that utilizes overlapping carbonless papers to record the same transaction to several records simultaneously.
one-write system
46
Revenues or income resulting from veterinary activities and veterinary-related sales, such as pharmacy sales.
Operating income
47
Practice expenses are grouped into general categories, such as postage, office supplies, advertising, and laboratory supplies.
Out-of-line expenditure
48
A bookkeeping record that chronologically records transactions related to payment of employees, employee taxes, employer payroll taxes, and various amounts withheld from employee pay, such as employee copayment of health insurance premiums, garnishments, and voluntary retirement contributions.
Payroll journal
49
Imprest cash fund maintained for minor expenditures.
Petty cash
50
Revenues that are or will be collected because all events have occurred that establish the practice’s legal right of receipt from the client.
Realized revenues
51
Information accompanying payment that informs the vendor which invoices are being paid, including the customer account number, invoice number(s), and so on.
Remittance information
52
The income from goods sold and services rendered during a given period of time, equal to the inflow of cash and receivables from sales made during that period.
Revenue
53
An accounting concept wherein a revenue transaction is marked at the moment the revenue is earned, regardless of when cash is ultimately received for services or products provided.
Revenue recognition principle
54
The initial money investment necessary to start up a practice that allows it to cover initial operating expenses as well as equipment, technology, and organizational cost.
Seed capital
55
Financial statement detailing inflows and outflows of cash between two points in time.
Statement of cash flow
56
Physical assets, such as buildings, inventory, and equipment.
Tangible property
57
An adding machine used by cashiers, bookkeepers, and accountants to quickly tally long lists of numbers, and providing an option for printing to a narrow roll of paper to create a printed tape used as a proofing mechanism for bank deposit totals, among other number lists.
Ten key
58
Amount owed to a vendor.
Trade account payable
59
Amount owed from a client.
Trade account receivable
60
An expense that directly and proportionately fluctuates in amount in relation to the volume of activity.
Variable cost (or variable expense)
61
An amount charged to a client that is later removed from the financial records and deemed unrecoverable because of nonpayment.
Write-off
62
What is the Accounting Equation?
Assets = Liabilities + Equity
63
What is Accounts Receivable turnover (A/R Turnover) equation?
Annual Revenue / Accounts Receivable
64
What is the Annual revenue per Veterinarian
Annual gross revenue / # FTE Veterinarians
65
What is the Average age of A/R equation?
365 days / A/R turnover
66
What is the Average age of Inventory equation?
365 days/year / A/R Turnover
67
What is the Average Transaction value (ATV) Equation?
Total Revenue / total # transactions
68
What is the Cash Flow (Current Ratio) equation?
Current Assets / Current Liabilities
69
What is the Economic Order Quantity (EOQ) equation?
```
Square root of ((2 x A x F) / (H x UC))
Where:
* A = Annual demand in units
* F = Fixed Ordering costs/order
* H = holding costs exp. on annual basis as % of unit cost
* UC = Cost to purchase from vendor
```
70
What is the Efficiency ratio?
of patient visits / # of staff hours
71
What is the employee retention ratio?
( # of positions retained / # of positions in the organization )
x 100
72
What is the Employee Turnover ratio?
of employees who have left the organization
/
# of employee who are in the organization
x 100
73
What is the Equity Ratio?
Total Liabilities / Total Owner's Equity
74
What is the gross profit equation?
Revenue - cost of goods sold = gross profit
75
What is the Inventory Turnover rate?
Annual purchase of supplies
/
Average inventory value
76
How do you calculate Net income (before taxes)?
Gross profit - operating expenses = net income (before taxes)
77
How do you calculate Net income (or loss) after taxes?
Net income - taxes = net income (or loss)
78
How do you calculate Profit Margin?
Net income (before taxes) / Revenue
79
What is the Profitability Ratio?
Operating Income / Revenue
80
How do you calculate Return On Investment (ROI)?
( Expected annual return / investment ) x 100
81
How do you calculate Working Capital?
Cash on Hand + A/R - Current Liabilities
82
Maximizing inventory turnover is a key strategy in creating an efficient and profitable inventory system. Name 4 ways to increase your inventory turnover.
1. Product consolidation2. Order quantities that make sense3. Measure and increase compliance4. Doctor and staff product education
83
The art of measuring, communicating, and interpreting financial activity.
Accounting
84
The amounts the practice owes to suppliers that are payable in the future.
Accounts Payable (AP)
85
Money that is owed to the practice by a client for products or services provided on credit.
Accounts Receivable (AR)
86
A system that recognizes revenue as earned and expenses as incurred.
Accrual Accounting.
87
Accounting method that recognizes income when it is earned, and expenses when they are incurred regardless of when cash is received or disbursed.
Accrual basis.
88
Relating to income that remains after the deduction of taxes due.
After-Tax
89
A particular period of time, as distinguished from other periods.
Aging.
90
Periodic expense attributed to the decline in usefulness of intangible assets over its estimated useful life.
Amortization
91
Any Asset that lacks physical substance and is usually very hard to valuate.
Asset - Intangible
92
A trust which can be used to maintain control over the trust assets for a designated period of time, which may survive death.
Asset Control
93
Things of Value owned by a business enterprise, such as cash, accounts receivable, and equipment.
Assets.
94
Any Asset reasonably expected to be sold, consumed, or exhausted through the normal operations of the business within the current fiscal year.
Assets - Current
95
Any Asset that cannot easily be converted to cash
Asset - Fixed
96
Give examples of a Current Asset
Short Term Assets such as general inventory, cash, and accounts receivable.
97
Give Examples of a Fixed Asset
Long term Assets such as land, buildings, and equipment.
98
Give examples of an intangible asset.
Not physical in nature such as goodwill and copyrights.
99
A record of financial transactions from which an accountant can reconstruct the sequence of events.
Audit Trails
100
Total Revenue of a time period divided by the total number of transactions in that period.
Average transaction charge.
101
Also referred to as the “statement of financial conditions” and summarizes the assets, liabilities, and owner's equity at a particular date.
Balance Sheet
102
Summary of financial transactions which have occurred over a given period on a bank account.
Bank Statement
103
Measurable quantities for a given period of time that are considered industry standards.
Benchmark
104
The process by which a business compares itself to others.
Benchmarking
105
A charge added to the bill sent to a client when the usual practice policy requires payment at the time of service.
Billing Fees.
106
Money or an equivalent given in addition to an employee's usual compensation.
Bonus.
107
An Analysis that is used to determine when your business will be able to cover all of it's expenses and begin to make a profit.
Break-Even Analysis
108
A financial projection used to estimate and control the results of future business operations.
Budget
109
The rights (equity) of the owners in a business enterprise.
Capital
110
One entity acquiring control of another entity.
Capital acquisition.
111
Property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating.
Capital Asset.
112
A system that recognizes income only when cash is collected from a sale and recognizes expenses when cash is actually paid for goods and services received.
Cash Accounting.
113
Accounting method that measures income when cash is received and expenses when cash is spent.
Cash Basis
114
An estimate of Cash receipts and disbursements for a specific periods of time. Used to determine whether a business has enough money to maintain standard operations. Also helps determine if cash money is being used in unproductive capacities.
Cash Budget.
115
Financial report on the sources of cash and uses of cash.
Cash Flow Statement.
116
Accounting professional who has attained certification by passing a comprehensive exam, and maintained with continuous professional education, and subscribing to a heightened level of business ethics.
Certified Public Accountant (CPA)
117
A systematic listing of all account names and numbers used by a company.
Chart of Accounts.
118
Procedures set in place to reduce mistakes of improper behavior.
Checks and Balances.
119
A reduction in price for services or products rendered to an individual.
Client Discounts.
120
The Act or Process of collecting funds owed to the business or organization.
Collections.
121
Any legal or equitable procedure through which some portion of an employee's earnings is required to be withheld by an employer for the payment of commission based pay on services or products that have not been collected.
Commission Pay Garnishments.
122
An index of prices used to measure that change in the cost of basic goods and services in comparison with fixed base period.
Consumer Price Index (CPI)
123
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.
Cost of Living (COL)
124
Clear, written guidelines that set the terms and conditions for supplying goods and services on credit, consumer qualification criteria, procedure for making collections, and steps to be taken in case of consumer delinquency.
Credit Policy
125
A duty of obligation to pay money, deliver goods, or render services under an express or implied agreement.
Debt
126
Business expenses or losses that are legally permitted to be subtracted from the gross revenue from a business when computing its taxable income.
Deductions.
127
A sum of money placed or kept in a bank account usually to gain interest.
Deposits.
128
The process of allocating the cost of an asset across the time period for which it provides benefit.
Depreciation.
129
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 job.
Differential Pay
130
The electronic transfer of a payment directly from an account of the payer to the recipient's account.
Direct Deposit.
131
A reduction in price for services or products.
Discounts.
132
A notification sent to a consumer, stating that the consumer is overdue in paying an account receivable to the sender.
Dunning Letter.
133
The process of moving transaction funds from one back to another via the Automated Clearing House of the Federal Reserve Network.
Electronic Funds Transfer (EFT)
134
The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.
Embezzlement.
135
The Owner's Claim on the practice's assets.
Equity.
136
An employee who is exempt from minimum wage and overtime requirements of the Fair Labor Standards Act.
Exempt Worker
137
Measured outflow of services and/or goods, matched to the revenue generated for the outflow.
Expenses.
138
A system used by insurance companies in the US to set the premium to be paid be the insured on the basis of risk to the company providing the insurance.
Experience rating.
139
A tax levied by the US IRS on the annual earnings of the individuals, corporations, trusts and other legal entities.
Federal Income Tax.
140
Money charged for payments that extends beyond an agreed upon time limit; the amount charged is governed by the usury laws in the state within which you practice.
Finance Charge.
141
Any fee representing the cost of credit, or the cost of borrowing.
Finance fees.
142
Expenses that have to be paid be a company, independent of any business activity.
Fixed Costs.
143
A Cost that does not change with an increase or decrease in the amount of goods or services produced.
Fixed Expense/Cost
144
Costs that may be manipulated in amount, or eliminated by not engaging in the activity that incurred the expense.
Flexible/Variable Expenses.
145
An act or course of deception; an intentional concealment of the truth to gain unlawful or unfair advantage.
Fraud
146
The collection of all assets, Liabilities, Equity, Revenue, and expense accounts from which the financial statements are derived.
General Ledger.
147
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.
Generally Accepted Accounting Principles (GAAP)
148
The total value of goods produced and services provided in a country during one year.
Gross Domestic Product.
149
Past Periods data, usually used as a basis for forcasting future trends.
Historical Data.
150
A fund or cash reserve that is maintained at a constant level for lengthy periods of time.
Imprest account.
151
A gain or recurrent benefit, usually measured in money.
Income.
152
A report on Financiald performance that covers a period of time and reports income and expenses during that period.
Income statement / Profit and Loss statement
153
Tax levied by a government directly on income, especially an annual tax on personal income.
Income Tax.
154
Formed into legal corporation
Incorporated.
155
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
Inflation rate.
156
The cost of borrowing money, assessed by the lender overtime, usually expressed as a percentage.
Interest Charges.
157
The amount charged expressed as a percentage of principal, by a lender to a borrower for the use of assets.
Interest Fees.
158
Typically noted on an annual basis known as the annual percentage rate (APR)
Interest Rate
159
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.
Internal Auditing Controls.
160
All measures, systems, and protocols used by a business to prevent errors, waste, and fraud; to ensure the reliability of accounting data, and promote policy compliance.
Internal Controls.
161
A bookkeeping term that describes the document in which business transactions are originally recorded as they occur. The book of entry prior to the ledger.
Journal.
162
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.
Key Performance Indicator (KPI)
163
Enhancements paid for by a tenant to leased space.
Leasehold improvements.
164
The Practice's Debts
Liabilities.
165
A corporate structure whereby the members of the company are not personally liable for the company's debts or liabilities.
Limited Liability Company (LLC)
166
Assets that can be converted into cash quickly and with minimal impact to the price received.
Liquid Assets.
167
Exercise aimed at formulating a long term plan, to meet future needs estimated usually by extrapolation of present or known needs.
Long-Range Planning.
168
Revenue less expenses.
Margins
| Also known as Profit margins.
169
Account statement mailed or sent by electronic mail to a consumer that lists debits, credits, service charges, and account adjustments during the prior month.
Monthly Statements.
170
A veterinary practice with little to no profit.
No-Lo Practice
171
A worker who is not exempt from minimum wage and Overtime requirements.
Non-exempt worker.
172
The expenses of a business not directly associated with the making of a product, or providing of a service, such as administrative, technical, or selling expenses.
Operating expenses.
173
Revenues or income resulting from veterinary activities and veterinary related sales such as pharmacy sales.
Operating income.
174
Hours worked in excess of the maximum regular number of hours fixed by statue, union contract, or custom.
Overtime.
175
The portion of a business's equity which remains for the owners after all liabilities have been paid and all other creditors have been reimbursed.
Ownership Equity.
176
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.
Paid Time Off (PTO)
177
The various methods used to collect payment from a client.
Payment options.
178
A system that calculates the amount you owe your employees based on factors such as the time they worked, their hourly wages or salaries, and whether they took vacation or holiday time during the pay period.
Payroll System.
179
Imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.
Payroll Tax
180
The worth that a product or service has in the mind of the consumer.
Perceived Value.
181
A small fund of cash maintained for incidental expenditures.
Petty Cash.
182
A category of healthcare software that deals with the day to day operations of a veterinary practice.
Practice Information Management Software (PIMS)
183
The current monetary value of some defined investment return, given a specified rate of return.
Present value of money
184
Considered or calculated before the deduction of taxes.
Pre-Tax
185
Productivity based pay rewards employees based on measurements of the quantity of work and outputs.
Production Pay
186
A financial gain, especially the difference between the amount earned and the mount spent in buying, operating, or producing something.
Profit.
187
Summary of the practice's income, expenses, and resulting profit or loss for a specified period.
Profit and loss (P&L)
188
A section of the practice that can be assessed in terms of its revenues and expenses.
Profit centers.
189
A projection or estimate of what may result in the future, given current assumptions and predictions.
Pro-Forma Budget.
190
A compensation structure for associates which combines a guaranteed salary based with a percentage of an associate's production.
Pro-Sal
191
A written acknowledgement that sometime of value has been transferred from one party to another.
Receipts.
192
An accounting process used to compare two sets of records to ensure the figures are in agreement and are accurate. It is the key process used to determine whether the money leaving an account matches the money spent.
Reconciliation.
193
The act of compensating someone for an expense.
Reimbursement.
194
A tenant's regular payment to a landlord for the use of property or land.
Rent
195
A measure of profitability used to refer to a single project and expressed as a ratio.
Return on Investment. (ROI)
196
All sales of the practice- for goods and services.
Revenue
197
When employees in lower level jobs are paid almost as much as their colleagues in higher level jobs, including managerial positions.
Salary Compression.
198
A tax on sales or the receipts from sales.
Sales Tax
199
Expenses which contain both a fixed cost component and variable cost component. The fixed cost element is part of the cost that needs to be paid irrespective of the level of activity achieved by the entity.
Semi-Variable costs.
200
An extra charge assessed for a service.
Service Charges.
201
An individual or institution (including a corporation) that legally owns a share of stock in a public or private corporation.
Shareholder.
202
Represents the amount by which a practice is financed through common and preferred shares.
Shareholder's equity.
203
The process of setting smaller, intermediate milestones to achieve within closer time frames when moving towards an important overall goal.
Short-Term Goals.
204
The goods or merchandise kept on the premises of a veterinary practice that are available for sale or distribution
Stock
205
An organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
Strategic Planning.
206
A process for identifying and developing new leaders who can replace old leaders when they leave, retire or die.
Succession planning
207
Outside lending services for clients with large balances, offering the option to pay back that balance over time.
Third Party Lenders.
208
Methods for collecting employees hours worked during the pay period.
Time Clock Systems.
209
Benefits' coverage earned by an employee, usually based on years of service with an employer. Accrued benefits may include vacation sick or personal time.
Time Off Accrual
210
an instance of buying or selling something.
Transaction.
211
A written record of a financial transaction.
Transaction Receipt.
212
A source of income for workers who have lost their jobs through no fault of their own.
Unemployment Insurance.
213
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated.
Unemployment Taxes.
214
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.
Use Tax
215
Expenses that increase or decrease as a dollar amount in direct relation to the volume of practice activity.
Variable Costs.
216
A form completed by an employee to indicate his or her tax withholding preferences to the employer.
W-4
217
A fixed regular payment typically paid on a daily or weekly basis, made by an employer to an employee.
Wages.
218
A Cancellation from an account of a bad debt or worthless asset.
Write-offs
219
What is considered more accurate, cash based accounting or accrual based accounting?
* Cash Based
* Accrual Based.
Accrual Based.
220
Which financial statement is considered the most important for small business?
* Cash Flow Statement
* Balance Sheet
* Profit and Loss Statement
Profit and Loss Statement
221
Is staff payroll considered a fixed or variable expense?
* Variable.
* Fixed
Fixed
222
The Federal Insurance Contribution Act – or FICA is a payroll tax that is paid by the employer or employee?
* Both employer and employee
* Employer
* Employee
Both employer and employee
223
Which payroll tax is paid by employers only and only on the first $7,000 of an employee’s earnings?
* State Unemployment Tax Act (SUTA)
* Federal Unemployment Tax Act (FUTA)
* Workers Compensation Tax.
Federal Unemployment Tax Act (FUTA)
224
What is an Employer Identification Number (EIN)?
* It is a number assigned by the Federal Trade Commission in order for the IRS to track revenue earned and taxes paid on that revenue.
* It is a business identification number assigned by the IRS to identify tax accounts of employers.
* It is a federally required identification number assigned by the IRS for purposes of tracking the federal taxes on business earnings.
It is a business identification number assigned by the IRS to identify tax accounts of employers.
225
AR that are over ______% need intervention to get the entire team to follow an AR policy.
* 2%
* 3%
* 4%
* 5%
3%
226
Which Act prohibits placing “delinquent account” stickers on the outside of an envelope when mailing statements to clients?
* The Fair Debt Collections Practices Act
* The Consumer Protection Act
* The Consumer Confidentiality Act
The Fair Debt Collections Practices Act
227
What does the accounts receivable turnover calculation tell us (Multiple Choice)?
* The fiscal health of the practice as it relates to accounts receivable as a percentage of gross revenue.
* How many times the accounts receivable balance is converted into cash.
* The ratio shows how efficient a company is at collecting its credit sales from customers.
2. How many times the accounts receivable balance is converted into cash.
3. The ratio shows how efficient a company is at collecting its credit sales from customers.
228
* What three financial responsibilities are typically outsourced in most practices?
Primary tax preparation and advice.Valuation of the practice.Large financial issues.
229
Are wages for doctors who are paid on a salary basis considered a fixed or variable expense?
Fixed
230
Define Cost Of Goods Sold.
The products used to produce a service for the client, or products sold to clients.
231
Offer five examples of products that would be included in COGS.
Drugs, Lab, Supplies, OTC, Vaccines
232
This type of accounting recognizes revenue when it is earned and expenses when they are incurred. When goods are received and services are performed. Is this Cash-based or Accrual-based?
Accrual
233
Which type of accounting is typically considered more accurate?
Accrual
234
What is another name for the Profit and Loss Statement?
Income Statement
235
When comparing expenses on the Profit and Loss Statement it is important to express expenses in dollar amounts but also as ___________________.
Percentages of gross
236
The basic accounting equation is Assets = __________ + _________.
Liability and Owner's Equity
237
Regarding payroll deductions; what does FICA stand for, what does it fund, and is it paid by the employer, employee, or both?
Federal Insurance Contribution Act - a tax paid by both the employer and the employee to fund Social Security and Medicare.
238
At the end of the year, any independent contractor who received more than $______ in wages from the practice must be issued a 1099 form.
$600
239
If the contractor fails to file and pay their taxes, and the practice did not issue a form 1099 at the end of the year, what risk is the practice subject to?
The practice can be held responsible to pay all back taxes, interest, and penalties.
240
If the practice is found to be spending more than it is generating, what steps can be taken to gain control?
Decrease spending and increase revenue.Hold employees accountable for waste.Consider reevaluating your fee structure.Review charges to be sure they are being captured correctly and not missed.If a line of credit is necessary to keep the practice viable in the short term, have a plan to pay back the loan as soon as possible.
241
AR should be no higher than _____% of gross revenue?
1.5%
242
When a non-sufficient funds check has been written to the practice, the practice has three choices of action, what are they?
Accept the financial loss
Attempt to collect
Use a third party collection agency
243
Which act regulates collection procedures of past due accounts?
Fair Debt Collection Practices Act.
244
Accounts receivable turnover – how many times the accounts receivable balance is converted into cash. What is the formula for AR Turnover?
Credit Sales / Average Accounts Receivable = Accounts Receivable Turnover
245
Regarding the value of the accounts receivable turn-over; is it better to have a higher or lower number?
A higher value for the accounts receivable turnover ratio is better because it indicates the AR balance is turned into cash more often.
246
```
Expansion, prosperity, contraction, and recession are the four stages of;
a. The budget process.
b. The business cycle.
c. Exit strategy awareness.
d. Business valuation timing.
```
b. The business cycle.
247
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.
a. Remove any non-recurring items from the previous year.
| b. Combine the last 3 years as an average.
248
Which metrics below are important considerations when creating a budget (Multiple choice)?
* Last three years Profit and Loss and Productivity Statements.
* All lease and loan documents.
* Fee schedule.
* List of operational changes expected in the next few years and their potential effect on revenue and/or expenses (new services, expansion, etc.).
* List of major capital
All of the Above
249
In regards to creating a Credit Policy; what are the two sub policies that you should begin with (Multiple Choice)?
* Client Credit Policy
* Client Charge Policy
* Charge Account Policy
1. Client Credit Policy
&
3. Charge Account Policy
250
* 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.
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.
251
A list of procedures to use when considering ways of extending credit to clients includes available credit based on the client’s longevity & long-standing payment history with the practice.
* True
* False
True
252
What is the Consumer Price Index?
* A list or index of prices used to measure the change in the cost of basic goods and services.
* An index report of goods and services used to track consumer spending trends for purposes of determining price points in business.
* An index of consumable goods created by the Bureau of Labor Statistics that helps establish economic trends in business.
* A list or index of prices used to measure the change in the cost of basic goods and services.
253
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.
* True
* False.
True
254
In relation to Fee Analysis; which of the following elements should be included in the calculation (Multiple Choice)?
* Variable cost per minute.
* Staff cost per minute.
* Doctor cost per minute.
* Fixed cost per minute.
2. Staff cost per minute.
3. Doctor cost per minute.
4. Fixed cost per minute.
255
Marsha Heinke DVM states _____% of practices have been victims of fraud or embezzlement.
* 80%
* 67.8%
* 49.8%
67.8%
256
It is recommended that practices do not prosecute confirmed cases of embezzlement unless the loss is determined to be greater than $2,000.
* True
* False
False
257
What entity may be a good resource for the practice in the event embezzlement is suspected?
* The Federal Trade Commission.
* Your Insurance Carrier.
* Business Protection Agency
* All the above.
Your Insurance Carrier.
258
What is the percent of gross if the gross revue is $1,250,000.00 and the expense is $87,365.00?
6.9%
259
What is the final (or sixth) stage of budgeting (kudo points if you can name any other stages)?
* Determining the desired financial results.
* Analysis of the financial statements
* Normalizing the revenue and expenses
* Budgeting revenue
* Budgeting expenses
* Combining budgeted revenue and expense and making adjustments
Combining budgeted revenue and expense and making adjustments
260
Patient volume is considered a _______ _______ of revenue growth.
Key Driver.
261
A simple method of creating an expense budget is to add what to the base expense figure?
The last three years average growth rate.
262
What is the difference between the Client Credit Policy and the Charge Account Policy?
Client Credit Policy – establishes the pre-qualifications necessary to open a charge account. Example; a client may need a minimum of 2 years of perfect payment history without a problem.
Charge Account Policy – establishes credit limits, payment due dates, payment methods and invoicing procedures.
263
The fee schedule should be reviewed minimally ________ a year.
Once
264
As a refresher the following is the formula used to determine fees;
(Fixed costs/minute + Staff costs/minute) X (Length of procedure in staff minutes) + (DVM costs/minute) X (length of procedure in DVM minutes) + (direct costs X 2) + Profit.
Using the totals below what price should you charge for this service?
* Fixed costs = $2.35.
* Staff costs per minute = $1.82
* Staff time = 2 technicians, 6 minutes each.
* DVM cost per minute = $3.09
* DVM time = 3 minutes.
* Direct costs = $0.87Profit set point = 20%
```
Formula = ($2.35 + $1.82) X (12 minutes) + ($3.09) X (3 minutes) + ($0.87 X 2) + 20%.
($4.17 X 12 = $50.04) + ($3.09 X 3 = $9.27) + ($1.74) + 20%
$50.04 + $9.27 + $1.74 =$61.05
$61.05 X 0.20 = $12.21
$61.05 + $12.21 = $73.26
$73.26
```
265
What percent of gross revenue is said to be lost to embezzlement in small businesses annually?
>5%
266
What is the most often used chart of accounts?
AAHA
267
Why is a Petty Cash system suggested over using cash from the reception drawer for smaller purchases?
Improves internal controls by providing a system for tracking cash purchases
