Deck 21: Financial Management Key

Question 1

Any payment the physician's office makes for goods or services is called ____.

A) accounts receivable
B) a disbursement
C) a counter check
D) a limited check
E) a voucher check

Answer 1

a disbursement

Question 2

A special bank check that allows the depositor to withdraw funds from her account only is called a ____ check.

A) counter
B) certified
C) voucher
D) traveler's
E) limited

Answer 2

counter

Question 3

Which type of checks are preprinted in $10, $20, $50, and $100 denominations?

A) Traveler's
B) Voucher
C) Limited
D) Certified
E) Counter

Answer 3

Traveler's

Question 4

Which type of check is usually used for payroll in the medical office?

A) Voucher
B) Limited
C) Counter
D) Cashier's
E) Traveler's

Question 5

Which of the following are usually components of a practice's accounting system?

A) Employment contracts
B) Daily log and disbursements journal
C) W-4 forms from all employees
D) A 401(k) plan
E) Electronic health records

Question 6

The process of communicating the income and expenses of a business and its financial health is known as ____.

A) bookkeeping
B) journalizing
C) accounting
D) reconciliation
E) endorsement

Question 7

Which type of check would state "Pay to the Order of Myself Only"?

A) Traveler's
B) Voucher
C) Limited
D) Certified
E) Counter

Question 8

Which of the following types of checks is preprinted and might be used by a physician to pay for out-of-town conference expenses?

A) Counter
B) Certified
C) Voucher
D) Traveler's
E) Limited

Question 9

Which of the following accounts payable is typically the largest in a medical office?

A) Payment for supplies and equipment
B) Payroll
C) Taxes owed to federal, state, and local agencies
D) Licensing for physicians and staff
E) Payment for practice-related products and services

Question 10

A physician may periodically review which of the following to ensure that the books balance?

A) Accounts receivable
B) Trial balance
C) Statement of income and expense
D) Cash flow statement
E) Quarterly return

Question 11

Which of the following is important because it helps to control expenses?

A) Tracking
B) Pay schedule
C) Tax liability
D) Petty cash fund
E) ABA number

Question 12

A standard personal or business check that the bank verifies and then sets aside the funds to guarantee payment is a ____ check.

A) traveler's
B) voucher
C) limited
D) certified
E) counter

Question 13

Which of the following shows how much cash is available to cover expenses, to invest, or to take as profit?

A) Statement of income and expense
B) Trial balance
C) Tracking
D) Cash flow statement
E) Quarterly return

Question 14

Which of the following demonstrates the practice's profitability by illustrating the practice's total income and expenses?

A) Tracking
B) Statement of income and expense
C) Cash flow statement
D) Quarterly return
E) Trial balance

Question 15

A physician may use a ____ check when he wants to withdraw money from the bank account but forgot his checkbook.

A) traveler's
B) voucher
C) limited
D) certified
E) counter

Question 16

One of the most common or numerous disbursements is payment for ____.

A) equipment
B) rent
C) office supplies
D) utilities
E) dues

Question 17

Which type of check is purchased from a bank, written on the bank's own checking account, and signed by a bank official?

A) Certified
B) Traveler's
C) Cashier's
D) Voucher
E) Counter

Question 18

Business checks with stubs attached are ____ checks.

A) counter
B) voucher
C) limited
D) traveler's
E) certified

Question 19

A type of check that states it is void after a certain time limit is a ____ check.

A) voucher
B) cashier's
C) counter
D) traveler's
E) limited

Question 20

Today, a practice's financial summary is generally prepared by ____.

A) the physician
B) a senior accountant
C) practice management software
D) the practice's auditors
E) an attorney

Question 21

When a patient has a credit balance, ____.

A) the account should be sent to a collection agency
B) a statement should be sent asking the patient to submit the balance
C) the practice can deduct the amount from the patient's account
D) the patient can be allowed to pay it at the next office visit
E) the practice owes the patient money

Question 22

When you place a patient's ledger card on the pegboard, how should you position the card?

A) Align the ledger card's first blank line with the carbon strip under the next available superbill
B) Align the top of the ledger card with the top of the daily log
C) Align the bottom of the ledger card with the carbon strip under the next available superbill
D) Align the top of the next available superbill with the top of the ledger card
E) Align the right side of the ledger card with the right side of the superbill

Question 23

A third-party endorsement is also known as a ____.

A) restrictive endorsement
B) qualified endorsement
C) blank endorsement
D) mechanical endorsement
E) special endorsement

Question 24

Charise was seen today for an ongoing infection. When she comes to the counter to check out, you tell her that the charge for today is $54. Charise takes her $260 paycheck out of her pocket and endorses it "Pay to the order of BWW Medical Associates," signs it "Charise Williams," and hands it to you. What should you do?

A) Explain that office policy does not allow you to take third-party checks
B) Accept and record the check and give Charise $206 in change
C) Accept and record the check, but tell Charise that you cannot give her any change
D) Ask Charise to wait while you call her employer to confirm that the check is good
E) Tell Charise that she must pay cash for her visit

Question 25

When the office manager or physician decides that an account is uncollectable, you should ____.

A) send the account to a collection agency
B) send the account to the state regulator's office
C) send one last notice to the patient to pay the amount due
D) adjust the amount due off the account
E) ask the patient to come to the office to discuss options

Question 26

A type of endorsement often used by attorneys when they accept a check on behalf of a client but have no personal claim on the transaction is _____.

A) restrictive endorsement
B) qualified endorsement
C) blank endorsement
D) mechanical endorsement
E) special endorsement

Question 27

Jim Sanderson comes to the office today to pay the balance due on the statement you sent him last week. He presents the statement, showing an amount due of $96.75, and a money order for $96.75. What should you do?

A) Explain that office policy allows you to accept only cash, check, or credit card
B) Accept the money order and record it on the daily log and the patient's ledger card
C) Complete the stub attached to the check and return the stub to Mr. Sanderson
D) Ask Mr. Sanderson for a photo ID to prove that he purchased the money order
E) Ask Mr. Sanderson to wait while you verify that the money order is valid

Question 28

The process of recording services provided, the fees charged, and payments received in a daily log is known as ____.

A) journalizing
B) endorsement
C) vouching
D) balancing
E) reconciling

Question 29

If you receive payment from a patient by mail after the office visit, you should record it ____.

A) on the daily log for the day of the patient's visit
B) on the patient's ledger card and the current day's daily log
C) directly onto the superbill
D) in the adjustment column
E) on the patient's ledger card only

Question 30

Which of the following is not an advantage of using a computerized bookkeeping system?

A) Built-in tax tables calculate tax liabilities.
B) The computer performs repetitive tasks.
C) The computer performs mathematical calculations.
D) The bookkeeping system is available even if the power goes out.
E) The computer produces reports automatically.

Question 31

The process of comparing the office financial records with the monthly statement from the bank is known as ____.

A) journalizing
B) reconciliation
C) endorsement
D) vouching
E) certifying

Question 32

At the beginning of each day, if you are using a pegboard system, what is the first thing you should put on the pegboard?

A) Superbill
B) Checks
C) Daily log sheet
D) Receipts
E) Patient ledger cards

Question 33

The part of the accounting process that consists of the systematic recording of business transactions is ____.

A) reconciliation
B) vouching
C) endorsement
D) bookkeeping
E) journalizing

Question 34

An endorsement that consists simply of the payee's signature is a ____.

A) restrictive endorsement
B) qualified endorsement
C) blank endorsement
D) mechanical endorsement
E) special endorsement

Question 35

An endorsement that specifies precisely how the check may be redeemed, such as only for deposit in the practice's bank account, is a ____.

A) restrictive endorsement
B) qualified endorsement
C) blank endorsement
D) mechanical endorsement
E) special endorsement

Question 36

The part of a check that takes the form of a fraction and identifies the specific bank on which a check is drawn is the ____.

A) memo line
B) routing number
C) ABA number
D) check number
E) MICR recording area

Question 37

Which of the following is not a common type of endorsement?

A) Restrictive endorsement
B) Qualified endorsement
C) Blank endorsement
D) Mechanical endorsement
E) Special endorsement

Question 38

A double-entry bookkeeping system is based on the principle that the company's assets are equal to ____.

A) capital minus its liabilities
B) liabilities minus its capital
C) assets plus its liabilities
D) assets minus its liabilities
E) capital plus its liabilities

Question 39

Which of the following is not a suggested practice for efficient bookkeeping procedures?

A) Be organized
B) Skip steps whenever possible
C) Make check marks next to completed entries
D) Write clearly
E) Use straight columns

Question 40

Another term for a write-it-once system is ____ system.

A) voucher
B) electronic
C) journalizing
D) third-party
E) pegboard

Question 41

The physician may use a(n) ________ check to withdraw money without having his or her checkbook because this type of check permits her to withdraw funds from her account only.

Question 42

A(n) ________ check is a payer's check written and signed by the payer; the bank withdraws the money from the payer's account and guarantees that the check will be paid when submitted.

Question 43

A(n) ________ statement shows how much cash is available to cover expenses, to invest, or to take as profits.

Question 44

In order to be considered ________, or legally transferable from one person to another, a check has to be written and signed by the payer and include the amount of money to be paid.

Question 45

The ________ appears as a fraction on the upper edge of all printed checks and identifies the geographic area and specific bank on which the check is drawn.

Question 46

Another term for a statement of income and expense is ________ statement.

Question 47

Goods or properties that have a dollar value, such as the medical practice building, bank accounts, office equipment, and accounts receivable, are called ________.

Question 48

A(n) ________ check is a check issued on bank paper and signed by a bank representative; it is usually purchased by people who do not have checking accounts.

Question 49

The person to whom a check is written is the ________.

Question 50

After receiving a check, immediately ________ it to prevent the check from being cashed if it is lost or stolen.

Question 51

One of the basic records of the single-entry system is the patient ________ cards, which show how much each patient owes.

Question 52

The process of keeping a daily log of the patient charges and payments received from patients each day is called ________.

Question 53

A(n) ________ check states that it is void after a certain amount of time and is sometimes used for payroll.

Question 54

By writing a(n) ________, or draft, or order for payment, the payer directs the bank to pay a sum of money on demand to the payee.

Question 55

A(n) ________ is a kind of certificate of guaranteed payment that can be purchased from banks and post offices and from some convenience stores.

Question 56

An overpayment to a physician results in a negative number, or ________ balance, on the patient's account.

Question 57

The process of communicating the income and expenses of a business and its financial health is known as ________.

Question 58

A(n) ________, which is sometimes called an encounter form or superbill, is the original record of the doctor's services and the charge for those services.

Question 59

You are reconciling the office checking account with the bank statement that arrived this morning. After accounting for unrecorded deposits, checks, and debits, you find that the total in your practice records is $11,760 and the bank's total is $12, 160. What is the first thing you should do?

A) Adjust the practice records to match the bank's total
B) Call the bank and inform them of the error on the statement
C) Review each item on the statement against your records to find the $400 difference
D) Inform the physician that the books do not balance this month
E) Ask the office manager to call the auditor to review the books

Question 60

Which of the following statements is true about electronic banking?

A) The computer computes the new balance each time you record a check.
B) You will no longer be responsible for recording and depositing checks.
C) The computer used for banking must be locked up at the end of the day.
D) You must still reconcile the bank statement on paper.
E) Cash flow in the office becomes slower and more difficult.

Question 61

When posting a payment from a collection agency, post the payment from the agency in the paid column and place the agency's fee in the ________ column.

Question 62

A(n) ________ banking system speeds up many banking tasks by performing calculations automatically.

Question 63

A(n) ________ gives a person the legal right to handle financial matters for another person who is unable to do so.

Question 64

Once a month, when the practice receives the monthly checking account statement from the bank, the statement should be compared with the office's financial records to ensure that they are consistent and accurate. This process is called ________.

Question 65

You should not accept a(n) ________ check that is made out to the patient rather than to the practice unless it is from a health insurance company.

Question 66

The part of the accounting process known as ________ is the systematic recording of business transactions.

Question 67

In order to be considered negotiable, a check must be signed by the ________.

Question 68

The ________ system allows you to write each transaction once while recording it on four different accounting forms.

Question 69

When performing bookkeeping procedures, you should strive for 100% _______, because an undetected error at the first link will be carried through all the other links in the chain.

Question 70

The portion of a company's assets that are paid for is the company's ________.

Question 71

________, or watching for changes in disbursements, is important because it helps control expenses.

Question 72

When a practice's income exceeds its expenses, the practice has a(n) ________; this is also known as "being in the black."

Question 73

A physician may use _______ checks when attending an out-of-town conference or whenever using a personal check or carrying a lot of cash is not appropriate.

Question 74

When a practice's expenses exceed its income, the practice has a(n) ________; this is also known as "being in the red."

Question 75

Electronic bookkeeping systems contain built-in tax tables that calculate tax ________ for you.

Question 76

The amount of money owed on a company asset is a(n) ________.

Question 77

Most practices may use checks from a standard checkbook or ________ checks, which often come in a three-ring binder and provide a stub for recordkeeping.