Section 5 Flashcards
(142 cards)
1
Q
Reconcile
A
Reconciliation is an accounting process used to compare two sets of Records to ensure that figures are in agreement and are accurate. It is the key process used to determine whether the money leaving an account matches the amount spent.
2
Q
Journal
A
A bookkeeping term that describes the document in which business transactions are originally recorded as they occur. The book of the entry prior to The Ledger.
3
Q
Receipts
A
A written acknowledgment that something of value has been transferred from one party to another.
4
Q
Debt
A
A Duty or obligation to pay money, deliver goods, or render Services under an Express or implied agreement.
5
Q
Depreciation
A
The process of allocating the cost of an asset across the time period for which it provides benefit, (known as the assets depreciable or useful life)
6
Q
Differential pay
A
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
7
Q
Dunning letters
A
A notification sent to a customer, stating that the customer is overdue in paying and accounts receivable to the sender
8
Q
Embezzlement
A
The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.
9
Q
Equity
A
The owner’s claim on the practice’s assets
10
Q
Experience rating
A
A system used by insurance companies in the US to set the premium to be paid by the insured on the basis of risk to the company providing the insurance
11
Q
Expenses
A
Measured outflow of services and/or Goods, matched to the revenue generated for the outflow.
12
Q
Fixed expense/ cost
A
A cost that does not change with an increase or decrease in the amount of goods or services produced.
13
Q
Flexible/variable expenses
A
Costs that may be manipulated in an amount, or eliminated by not engaging in the activity that incurred the expense.
14
Q
General ledger
A
The collection of all assets, liability, equity, revenue, and expense accounts from which the financial statements are derived.
15
Q
Generally accepted accounting principles (GAAP)
A
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.
16
Q
Gross domestic product (GDP)
A
The total value of goods produced and services provided in a country during one year
17
Q
Cost of living (COL)
A
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.
18
Q
Profit
A
A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
19
Q
Profit and loss( p&l or p/l)
A
Summary of the practices income, expenses, and resulting profit or loss for a specific period.
20
Q
Pro-forma budget
A
A protection or estimate of what may result in the future, given current assumptions or predictions.
21
Q
Interest rate
A
Typically noted on an annual basis, known as the annual percentage rate(APR)
22
Q
Internal auditing controls
A
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.
23
Q
Limited liability company(LLC) (US)
A
Is organized under state law and usually governed by a written operating agreement. LLCs have several benefits including tax benefits and protection from personal liability.
24
Q
Liabilities
A
The practice’s debts
25
Leasehold improvements
Enhancements paid for by a tenant to at leased space
26
Key performance indicator( kpi)
Also called key success indicator, 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.
27
Liquid assets
Assets that can be converted into Cash quickly and with minimal impact to the price received.
28
No-Lo practice
A Veterinary practice with little, to no profitability.
29
Operating income
Revenues or income resolving from Veterinary activities and Veterinary related sales, such as Pharmacy sales. Does not include non-veterinary related income such as interest income.
30
Ownership equity
The portion of a business is equity which remains for the owners after all liabilities have been paid and all other creditors have been reimbursed.
31
Paid time off(PTO)
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.
32
Payroll tax
Imposed on employers or employees and are usually calculated as a percentage of the salaries that employers pay their staff.
33
Practice management software
A category of healthcare software that deals with day-to-day operations of a Veterinary practice
34
Rent
A tenants regular payment to a landlord for the use of property or land
35
Return on investment (ROI)
A measure of probability used to refer to a single project and expressed as a ratio. Formula = revenue generated divided by the cost of assets consumed for the project.
36
Revenue
All sales of the practice for goods and services
37
Salary compression
When employees in lower-level jobs are paid almost as much as their colleagues in higher-level jobs, including managerial positions
38
Sales tax
A tax on sales or on the receipts from sales
39
Shareholder's equity
A practice's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus Treasury shares. Shareholder's Equity represents the amount by which a practice is financed through common and preferred shares
40
Statement reconciliation
A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies.
41
Stock
The goods or merchandise kept on the premises of a Veterinary practice that are available for sale or distribution
42
Succession planning
A process for identifying and developing internal people with the potential to fill key business leadership positions in the practice. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles
43
Transaction
An instance of buying or selling something; a financial transaction
44
Unemployment taxes (US)
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated
45
Use tax
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.
46
Inflation rate
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling
47
Incorporated
Formed into legal Corporation
48
Income tax
Text levied by a government directly on income, especially an annual tax on personal income.
49
Income statement
Also known as the profit and loss statement, a report on financial performance that covers a period of time and reports income and expenses during that period.
50
Income
A gain or recurrent benefit, usually measured in money
51
Imprest account
A fund or cash Reserve that is maintained at a constant level for lengthy periods of time
52
Historical data
Past periods data, usually used as a basis for forecasting future trends
53
Bank statement
Summary of financial transactions which have occurred over a given period on a bank account
54
Balance sheet
Also referred to as the "statement of financial conditions", the balance sheet summarizes the assets, liabilities, and owner's equity at a particular date
55
Benchmark
Measurable quantities for a given period of time that are considered industry standards
56
Budget
A financial projection used to estimate and control the results of future business operations
57
Capital
The rights( Equity) of the owners in a business Enterprise
58
Cash flow statement
Financial report on the sources of cash, and uses of cash
59
Cash budget
An estimate of cash receipts and disbursements for a specific period 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.
60
Cash basis
Accounting method that measures income when cash is received and expenses when cash is spent.
61
Cash accounting
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.
62
Certified public accountant (CPA) US
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
63
Asset - Intangible
Any asset that lacks physical substance and is usually very hard to valuate
64
Assets
Things of value owned by a business enterprise, such as cash, accounts receivable, and equipment
65
Assets - current
Any asset reasonably expected to be sold, consumed, or exhausted through the normal operations of the business within the current fiscal year
66
Assets - Fixed
Any asset that cannot easily be converted to Cash
67
Assets( current, fixed, intangible)
Current = short-term assets that says general inventory, cash, and accounts receivable.
Fixed = long-term assets such as land, buildings, and equipment.
Intangible = not physical in nature such as copyrights and Goodwill.
68
Accrual basis
Accounting method that recognizes income when it is earned, and expenses when they are incurred regardless of when cash is received or dispersed
69
Accounting
The art of measuring, communicating, and interpreting Financial activity
70
Acrual accounting
A system that recognizes revenues as earned and expenses as incurred
71
Production pay
Productivity based pay Rewards Employees based on measurements of the quantity of work and outputs.
72
Consumer Price Index (CPI)
An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period.
73
Commission pay garnishments
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
74
Checks and balances
The various procedures set in place to reduce mistakes of improper Behavior
75
Chartered accountant (CA) (CDN)
A chartered accountant has tested and been determined to have the qualifications to audit financial statements and business practices as well as offer advisory services to clientele. Equivalent to a CA designation in the US is a CPA
76
Deductions
Business expenses or losses that are legally permitted to be subtracted from the gross revenue from a business when Computing it's taxable income.
77
Direct deposit
The electronic transfer of a payment directly from the account of the payer to the recipient's account
78
Electronic funds transfer (EFT)
The process of moving transactions funds from One bank to another via the automated Clearing House of the Federal Reserve Network.
79
Employment Insurance (EI) (CDN)
Employment Insurance provides temporary financial assistance to unemployed Canadians who have lost their job through no fault of their own, while they look for work or upgrade their skills
80
Exempt worker
An employee who is exempt from minimum wage and over-time requirements of the fair labor standards act. The fair labor standards acts clearly defines what employees are eligible for exempt status
81
Federal income tax (us)
A tax levied by the US Internal Revenue Service on the annual earnings of individuals, corporations, trust and other legal entities
82
Non-exempt worker
A worker or employee who is not exempt from the minimum wage and overtime requirements of the fair labor standards Act
83
Overtime
Hours worked in excess of the maximum regular number of hours fixed by a statute, Union contract or custom
84
Payroll system
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.
85
Pre-tax
Considered or calculated before the deduction of taxes
86
W-4
A W-4 form is a form completed by an employee to indicate his or her tax withholding preference to the employer
87
Wages
A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee.
88
Pro-Sal
A compensation structure for Associates which combines a guaranteed salary base with a percentage of an associate's production
89
Reimbursement
The act of compensating someone for an expense
90
Time clock systems
Methods for collecting employee hours worked during the pay period
91
Time off accrual
Benefits coverage earned by an employee, usually based on years of service with an employer. Accrued benefits may include vacation, sick or personal time off
92
Unemployment insurance (US)
A source of income for workers who have lost their jobs through no fault of their own
93
Hourly/salary compensation
Hourly compensation must include overtime pay for all time worked in excess of 40 hours per week. Salary compensation is exempt from the overtime laws
94
Bonus
Money or an equivalent given in addition to an employee's usual compensation
95
Canadian pension plan (cpp) (cdn)
The Canadian pension plan is a contributory, earnings related social insurance program. It forms one of the two major components of Canada's public retirement income system, the other component being old age security (oas)
96
After-tax
Relating to income that remains after the deduction of taxes due
97
Discounts (A/P)
A reduction in price for services or products
98
Finance fees
Any fee representing the cost of credit, or the cost of borrowing
99
Interest fees
The amount charged, expressed as a percentage of principal, by A lender to borrower for the use of assets.
100
Net 10/30
Payment terms on an invoice. On A net10, the net amount is due within 10 days of the date of invoice. A net 30 would be within 30 days.
101
Operating expenses
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
102
Write offs
A cancellation from an account of a bad debt or worthless asset
103
Service charges
An extra charge asserted for a service
104
Transaction receipt
A written record of a financial transaction
105
Billing fees
A charge added to a bill sent to a client to compensate the veterinary practice for the cost of billing when the usual practice policy requires payment at the time of service
106
Aging
A particular period of time, as distinguish from other periods
107
Accounts payable (AP)
The amounts the practice owes to suppliers that are payable in the future
108
Accounts receivable (AR)
Money that is owed to the practice by a client for a product or Services provided on credit
109
Long range planning
Exercise aimed at formulating a long-term plan, to meet future needs estimated usually by extrapolation of present or known needs
110
Shareholders
An individual or Institution, including a corporation, that legally owns a share of stock in a public or private Corporation
111
Short range planning
The process of setting smaller, intermediate milestones to achieve within closer time frames when moving towards an important overall goal. Many business operations will engage in short-term planning that typically covers time frames of less than 1 year.
112
Strategic planning
An organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy
113
Capital acquisitions
One entity acquiring control of another entity
114
Asset control
A trust which can be used to maintain control over the trust assets for a designated period of time, which may survive death
115
Amortization
. Periodic expense attributed to the decline in usefulness of intangible assets over its estimated useful life
116
Deposits
A sum of money placed or kept in a bank account, usually to gain interest
117
Finance charge
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
118
Credit policy
Clear, written guidelines that set the terms and conditions for supplying goods and services on credit, customer qualification criteria, procedure for making collections, and steps to be taken in case of customer delinquency
119
Interest charge
The cost of borrowing money, assessed by the lender over time, usually expressed as a percentage
120
Monthly statements
Account statement mailed or sent by electronic mail to a customer that list debits, credits, service charges, and account adjustments during the prior month
121
Payment options
The various methods used to collect payment from a client
122
Present value of money
The current monetary value of some defined investment return, given a specific rate of return
123
Third party lender
Outside lending services for clients with large balances, offering the option to pay back the balance overtime
124
Collections
The act or process of collecting funds owed to the business or organization
125
Client discounts
A reduction in price for services or products rendered to an individual
126
Fixed costs
Expenses that have to be paid by a company, independent of any business activity
127
Profit centers
A section of the practice that can be assessed in terms of its revenues and expenses
128
Margins
Revenue less expenses. Also known as profit margin
129
Perceived value
The worth that a product or service has in the mind of the consumer. The consumers perceived value of a good or service affects the price that he or she is going to pay for it
130
Volume
The quantity or number of goods sold or Services sold in the normal operations of a company and a specified period. Example; high volume or low volume practice regarding length and number of appointments
131
Semi-variable cost
Expenses which contain both a fixed cost component and a 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
132
Variable cost
Expenses that increase or decrease as a dollar amount in direct relation to the volume of practice activity
133
Benchmarking
The process by which a business Compares itself to others
134
Break Even analysis
An analysis that is used to determine when your business will be able to cover all of its expenses and begin to make a profit
135
Average transaction charge (ATC)
Total revenue of a time period divided by the total number of transactions in that period
136
Fraud
An act or course of deception; an intentional concealment of the truth to gain unlawful or unfair advantage
137
Day end procedures
A fixed, step by step sequence of activities or course of action ( with definite start and endpoints) that must be followed in the same order to correctly perform a task
138
Internal control
All measures, systems, and protocols used by a business to prevent errors, waste, and fraud; to ensure reliability of accounting data, and promote policy compliance
139
Petty cash
A small fun of cash maintained for incidental expenditures
140
Timely deposits
Deposits should be made as often as possible, preferably daily. Failing to make timely deposits increases the risk of error and the risk of misappropriation of funds
141
Audit trails
A record of financial transactions from which an accountant can reconstruct the sequence of events
142
Chart of accounts
A systematic listing of all account names and numbers used by a company
