Answers to Self-Study Review Questions s1

Answers to Self-Study Review Questions

Chapter 16: Bookkeeping

1. Name the four kinds of bookkeeping systems. a. Single-entry b. Double-entry c. Pegboard d. Computerized

2. Increases in business assets are known as debits and decreases in assets are called credits.

3. Explain the following three basic terms in business. a. Assets: Anything owned by the business (equipment, furniture, bank accounts, buildings, accounts receivable) b. Capital: Original investment money and other property of a corporation that is owned c. Liabilities: Monies that are owed for business expenditures (debts)

4. To write in financial data on a general ledger or a patient’s ledger card is a task known as posting.

5. List three reasons why pegboard accounting is a popular bookkeeping method used by a physician’s practice. a. Accurate system b. Easy to learn c. Uses a write-it-once process for recording daily office transactions

A-1 6. The chronological history of the financial transactions of a patient’s account are recorded on a/an ledger card.

7. Explain what to “extend” the account means. To post the balance forward amount on a new ledger card.

8. Define the following bookkeeping symbols and abbreviations used when posting to an account. a. ROA: Received on account b. NC: No charge c. ($15.00): Credit of $15 d. B/F: Balance forward

9. State two instances when a patient would require two ledger cards. a. A private patient who suffers a work injury and becomes an industrial case b. A patient who is private one month and on the Medicaid program the next month

10. Minor cash purchases for office expenditures should be made from petty cash drawer or petty cash fund.