NAB Review Operations Flashcards
Current Asset is? Give examples.
Cash or short lived asses e.g A.R.s and C.D’s
Usually used up within one year
Fixed or non current assets are? Give examples
Assets that will NOT be used up within a year. E.g. building, equipment, etc.
Capital
Term meaning funds to be used in business.
Real estate, buildings, and certain equipment can be included under certain conditions.
Investment Capital
Cash used to purchase real estate and equipment, and to build- used to produce operation revenues.
Working Capital
Excess of current assets over current liabilities. A measure of company’s ability to pay bills.
Contract for personal services
The offer of money, consideration, acceptance. Spell out duties, authority, time, remuneration, escape clause, other terms.
Difference between Liabilities and Current Liabilities.
Liabilities are debts or obligations owed.
Current Liabilities are debts or obligations owed DUE WITHIN ONE YEAR. E.G. fica taxes, FWT(federal withholding tax), notes payable and dividends.
Long Term Liabilities
Debts or obligations NOT due for a period usually more than one year.
Mortgages, bonds, and prop liens.
Net Worth
Total assets - total liabilities = Net worth
Limited Liability Corporation (LLC)
Combines characteristics of corporations and partnerships. More flexible management.
Profit and losses can be allocated regardless of how stockholders are invested in the company.
Difference between For Profit and Not for Profit
For Profits- Profits go back to the owners in forms of dividends.
Not for Profit- Profits in the organization go back in the operations of the organization.
Capital Budget. Give examples. What’s the $ limit.
Includes real estate, buildings, equipment, usually limiting factor as re-coverage from expenses takes time
Medicare counts $5000 or more as capital if item has useful life in excess of one year.
Cash Budget
Forecast of all cash receipts and disbursements. Considers schedule of cash inflows and payments of obligations.
SHOWS AVAIBLE CASH
Operating Budget
Details of anticipated revenues (income) by service, and anticipated expenditures by category.
HELPS TO CONTINOUSLY STUDY AND CONTROL FINANCES.
Accounting
Standards established by accountants and boards. Generally Accepted Accounting Principles (GAAP)
Nearly all facilities now use computerized accounting.
Includes bookkeeping, budgeting, reports, specials, studies, auditing, designing systems.
Bookkeeping
Is the mechanical of recording business transactions.
Cash Basis
Revenues/Expenditures recorded when actually received or paid out, except for depreciation expense.
Accrual Basis
Revenue/Expenses recorded when incurred.
Medicare requires.
Chart of Accounts
Complete list of all categories in the ledge-may include number-receivables and payables-like table of contents.
Balance Sheet
Summarizes assets, liabilities, and stock holders’ equity.
Reflects SOLVENCY. Made up at ANY TIME.
Basic step of accounting called Entries are what?
Entries- Transactions recorded as they occur in the journal.
Tells where to post.
Posting is a basic step of account. What is Posting?
Transfer of debits and credits from journal to ledger which is charts of accounts-payables and receivables.
Last basic step of accounting is Tabulate. What is Tabulate?
Account balances periodically.
All assets costing _____ or more used more than one year are ________.
$5000
Depreciated
