Midterm I Flashcards
1
Q
Amounts to be received in the future due to the sale of goods or services
A
Accounts receivable
2
Q
Amounts to be paid in the future for goods or services already acquired
A
Accounts payable
3
Q
- The financial resources of the government
* Individual tax and social security tax are two major sources of the federal government’s revenue
A
revenues
4
Q
- Assets that are relatively permanent, such as land, buildings, and equipment
- Property Plant and Equipment
- Purchased over time and must be place over a long period of time
A
fixed assets
5
Q
- Amounts owed to creditors
- Include all obligations the practice has acquired through daily operations
- Accounts payable (hearing instrument acquisition costs), accrued business expenses or interest owed on loans, and other obligations
A
liabilities
6
Q
• The net cash equivalent amount paid or to be paid for an asset
A
acquisition costs
7
Q
- A statement of the organization’s purpose – what it wants to accomplish in the larger environment
- Reflect the purpose and long-term vision and goals of the practice
- Company’s present state
A
mission statement
8
Q
- An internal representation of the spatial relationships among objects in the environment
- Use different locations that are near certain buildings or aspects of that location to notify your clients where you are located
A
cognitive mapping
9
Q
- Assets of a permanent nature used in production of income, such as land, buildings machinery and equipment
- Under income tax law, it is usually distinguishable from “inventory” which comprises assets held for sale to customers in ordinary course of the taxpayer’s trade or business
A
capital assets
10
Q
• It’s when a business opens a satellite office and the location is such that is cannibalizing patients from the parent location
A
cannibalism
11
Q
- The method of accounting that recognizes revenue when it is earned and matches expenses to the revenues they helped produce
- Income and expenses be entered into the ledger when a transaction occurs regardless of whether monies have been received for the services or products provided
- Keeping track of a business’ income and expenses
- Big business – use accrual-based method
- Company’s financial position at a moment or point in time
A
accrual based accounting
12
Q
- Reporting income when the cash is received and expenses when the cash is paid
- Small business – use cash basis method to keep things simple
A
cash basis accounting
13
Q
• A sale in which cash is received for the total amount of the sale at the time of the transaction
A
cash sales
14
Q
- The cost of direct material labor manufacturing assembly and testing of an end item
- Sum of costs of all resources consumed in the process of making a product
A
manufacturer cost
15
Q
- The cost you charge customers for your merchandise
* Consumer spending drives up our economy
A
retail cost
16
Q
- A method of determining what sales volume must be reached before total revenue equal total costs
- Considers the fixed, variable, and total operational costs and determines the number of units or amount of revenue necessary for the practice to reach a break even point
- Put into spreadsheet form and various scenarios can be exercised to determine the necessary prices to cover expenses and to achieve profit goals
A
break-even analysis
17
Q
• Movement of the money you receive and the money you spend
A
cash flow
18
Q
- The amount of money a business pays for the products it sells or for the raw materials from which is produces goods to sell
- Making and/or acquiring the products
- Acquisition of products, ex: hearing aids provided by outside suppliers
A
cost of goods
19
Q
- Money owed
* National Debt: raising taxes/reducing government spending
A
debt
20
Q
- Marketing directed toward those groups (market segments) an organization decides it can serve profitability
- _______ is much wider than just patients currently served
A
target market
21
Q
- Accounting not a debit, part of income
- Depreciate equipment over 5 year period – accounting apart of income
- Decrease in value over time
A
depreciation
22
Q
o Sole proprietorship, partnership, corporation, limited liability company
o Insulate the personal assets of the owner-audiologists from at least the non-professional liabilities associated with the practice
A
legal entities
23
Q
o A business owned by one person
Easy to set up and requires little or no cost
Only needs a business license from local country
Pass through taxation
Assets directly to owner
Exit strategy is simple but tax implication if SP to corporation (S-corp)
No filing
A
sole proprietorship
24
Q
o A business in which two or more persons combine their assets and skills o LLP (Limited Liability Partnership)
A
partnership
25
o A business owned by stockholders who share in its profits but are not personally responsible for its debts
o Accomplish insulation of personal assets from creditors of the practice
corporation
26
o A business organization in which the business (not the owner) is liable for the company’s debts
Greater flexibility in ownership and ease of operation
No restrictions of ownership (shareholders)
Profits distributed as owners see fit
Simpler to operate
Member managed-responsibilities delegated to owners and managers
Pass through taxation
limited liability company (LLC)
27
o A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
Limitation of shareholders
Directors/officers manage company
No flexibility of how profits are split (profits split in accordance with ratio of stock ownership)
Salaries of ownership subject to employee tax
Pass through tax of dividend/distributions
S-corporation
28
o The most common type of corporation, which is a legal business entity that offers limited liability to all of its owners, who are called stockholders
C-corporation
29
• Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyright
capital expenditure
30
* A cost that rises or falls depending on how much is produced
* Increase in total costs resulting from an increase in the amount of business conducted
variable cost
31
• The practice of assigning monetary value to seemingly intangible benefits and natural capital
valuation
32
• A 12-month period, October through September, for planning the federal budget
fiscal year
33
* A list of possessions or goods on hand
| * Recording purchases and related acquisition costs of items necessary for daily practice operations
inventory
34
• A financial statement showing the revenue and expenses for a fiscal period (status of overall profits)
• Profitability of a company during the time interval
o Period of time statement covers is chosen by the practice accountant
• “Profit and loss statement”
income statement
35
• The process by which companies create value for customers and build strong customer relationships in order to capture value for customers in return
marketing
36
• The ability to reliably determine what your duty is, as a steady commitment to do your duty for its own sake
good will
37
• The portion of corporate profits paid out to stockholders
dividends
38
* The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted
* Sales less the cost of sales, and is a useful number for demonstrating the viability of a practice
gross margin
39
• The percentage of increase in the value of your savings from earned interest
rate of return
40
* Investigates the profitability of an organization in relation to its sales. Net operating margin expresses profitability as a ratio of income to sales
* Net Operating Margin = Total Operating Income / Total Sales
margin analysis
41
• A decrease in owner’s equity resulting from the operation of a business
expense
42
Ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future
o Amount recorded on the right side
credit
43
An amount recorded on the left side
debit
44
* The amount of a product a company expects to sell during a specific period at a specified level of marketing activities
* Set up a spreadsheet of projecting sales over the course of three years
sales forecast
45
• A planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats
SWOT analysis
46
* A decision by a corporation to turn over much of the responsibility for production to independent suppliers
* Provide a company an “edge” over organizations that fall into the economic trap “Jack-of-all-trades, master of none”
* Allows the company to utilize the experts while maintaining focus in its primary business – creates more flexibility and opportunity for the company to move forward
outsourcing
47
* Total assets – total liabilities
* How much the business makes, account for equipment
* Value of all assets minus total liabilities
* Everything you own after the costs
net worth
48
• Money that is invested in new or emerging companies that are perceived as having great profit potential
venture capital
49
• The difference between current assets and current liabilities
working capital
50
• A calculation of the total market value of all products/goods and services produced in our country in a given year, these values are established in a quarterly review, gives us an idea of how our economy is overall
gross domestic product (GDP)
51
* Statistic relating to economic activity which allows analysis of economic performance and the predictions of possible future performance
* Employment/unemployment, funding/or non-funding of practice or business, costs of products and reducing government programs
economic indicators
52
* Periods of good times, or prosperity, alternating with periods of economic hard times
* Most business managers need to be aware of the prevailing direction of the economic trend for the product/service markets in which they operate in order to make more accurate and effective plans for their practice/business
economic cycles
53
• General level of prices in the economy is rising
inflation
54
• A situation in which prices are declining
deflation
55
• A company’s product sales as a percentage of total sales for that industry
market share
56
* An index of the cost of all goods and services to a typical consumer
* Inflation is measured by CPI
* Measure that examines the weighted average of the price of a basket of consumer goods and services within various economic sectors, ex: transportation, food, or medical care
consumer price index
57
hiring protocols
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• Create a job description
• Evaluating applicants (resume)
• Candidate evaluations
o Look at qualifications and attributes
o Applicant tests?
• Pre-employment testing
• Phone interviews
• In-person interview
• Making the final decision
o Scales?
• Background checks
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58
recruiting protocols
* Post or advertise the position
* Issue explicit directions about how to apply for the position; request resume
* Resume screening develops pool of candidates
* Candidates sent position application with return-by date
* Schedule phone interview based on qualifications listed in application
* Phone interview to confirm candidates’ qualifications, assess phone skills and demeanor, and to prior work experiences
* Select candidates for face-to-face interviews
* Develop structured questions tied to decision-making criteria
* Contact licensing board for confirmation of license and status
* Review background check by local or state police
* Complete face-to-face interviews
* Offer position to selected candidate
59
• Helps with cash flow projections and budgeting, as well as with tax and other financial planning, and payroll
• Trained in bookkeeping procedure and in the preparation, audit, and analysis of accounts
• Provide practitioners with internal and external methods for monitoring theft and embezzlement, as well as honest bookkeeping errors by performing internal audits
• Offer personal and business financial planning services and business valuations
• Ensure funds are deposited in appropriate accounts
• Advise practitioner about the fiscal health of the practice
• Ensure expenses are paid on time and transactions are recorded properly
• Prepare reports for practitioners to assist in evidence-based decisions regarding the success or failure of daily operations, a specific procedure, or a new market offering
o Important to understand the positive or negative changes in bottom-line performance of the practice
accountant responsibilities
60
list of account responsibilites
* Cash into the practice (receivables)
* Cash payments from the practice (payables)
* Inventory and purchases
* Property accounting
* Tax accounting methods: cash or accrual
* Payroll preparation
* Assistance in monitoring the bookkeeper/financial manager
