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Financial Management

Chapter 21 Medical Assisting

Errors can result in Double billing, omitting bank deposits, improper payments to suppliers
Accuracy Strive for 100%
Establishing Procedures Be Organized, be consistent, use markers, write clearly, check your work.
What can be the result of errors in billing? Errors can result in billing a patient twice for the same service, omitting bank deposits, and making improper payments to suppliers.
Medical Office Accounting Methods Computerized (most common), manual systems (Single entry, double entry, pegboard),
Manual Systems for accounting Single entry, double entry, Pegboard.
All accounting methods record: Income, Charges, Disbursements, other financial information.
Electronic bookkeeping Preforms same tasks as manual bookkeeping, Saves time(preforms repetitive tasks, preforms math calculations, has built in tax tables)
Single Entry Transaction listed once to patient ledger, daily log, and checkbook.
Single entry disadvantages Not self-balancing and does not detect errors as readily.
Double-entry accounting Transactions are listed twice, Assets=Capital + liabilities, as payments are made on the asset both side of the equation continue to balance.
Capital Things that you own (Valuable) Things that are paid off.
Liabilities Things that you have to pay. You do NOT OWN them yet.
Write-it-once (pegboard) system Entry written one time in daily log sheet, patient ledger card, and charge slip.
Daily log Chronological list of charges, payments, and adjustments. Post from the log to patient ledger.
Journalizing The process of logging charges and receipts in a chronological list each day: used in single-entry system of bookkeeping.
Patient Ledger Card Patient information, demographics, financial transactions of patient accounts (payment, adjustments, balance owed), information from the daily log.
Accounts receivable Total owed to the practice. Total on accounts receivable= balances on patient ledger cards.
Accounts Payable Accounts owed to vendors. Practice owes money to people and services and goods.
Record of office disbursements List of payments, Information on record includes: payee, date, check number, amount paid, and type of expense.
Summary of charges, receipts, and disbursements Comparison of income and expenses Analyzing summaries.
Analyzing Summaries Areas of profitability, amount charged and payments received cost of running the office, categories of expenses.
What types of bookkeeping methods might you use in a medical office? You might use these bookkeeping systems in a medical office: Single-entry, Double-entry, and Pegboard.
Start of business day Setup peg board with daily log sheet, layer superbills, Patient process ledger card under next superbill, attach the superbill to the patient card.
Patient checkout Place superbill and ledger card on appropriate space of daily log.
Payments after patient visit Record payments appropriately and make adjustments as required.
Returned Checks Add back to patient balance, Add bank fees.
Overpayment Credit to patients account for refund.
End of day Total columns and correct errors.
Mr. Adams does not clear because of nonsufficient funds, What adjustments do you make to his account? The amount of the check is added back to the patient's balance. A fee for the returned check as well as any fees incurred as a result of the NSF check may also be added to the patient's balance.
Banking tasks writing checks, accepting checks, endorsing checks, making deposits, reconciling bank statements
Checks bank draft or order for payment. Negotiable.
Checks are: Signed by payer, amount to be paid, payable to payee, dated, and name of bank.
Cashier's checks Issued by the bank
Certified check Money certified available. (post office)
Voucher check Stub for record keeping Business use.
Limited check time limited. Loan companies mail for 60 days.
Counter check Withdrawals, paid to cash for yourself.
Traveler's check Established denominations. Access to money aboard.
Money order Guaranteed payment
Check codes- ABA number fraction on upper edge. Geographic area and bank.
Check codes- Magnetic ink character (MICR) codes Numbers and characters, read by the computer.
Checks include: Payer, date line, check number, ABA number, Payee, Amount box, Amount time, Bank information, account number, memo line, payer signature line, MICR recording area, routing number.
Accepting checks Review check before accepting it.
Do not accept Third party checks, checks marked paid in full.
Checking accounts Personal, business-office expenses, and interest earning for special expenses (nonprofit).
What is a negotiable instrument? A negotiable instrument is a check that is legally transferable from one person to another. A check must: Be signed by the payer, include the amount of money to be paid, be payable to the payee or bearer, be payable on demand or on a specific date.
What is a negotiable instrument? (cont'd) Include the name of the bank that is directed to make payment.
Blank Endorsement payee's signature
Restrictive endorsement Specifies "for deposit only"
Special endorsement Third party endorsement
Qualified endorsement used by attorneys
Endorsement guidelines Endorse immediately endorse in appropriate place, endorse in ink or use a stamp.
Completing the deposit slip post the payment to the patient ledger card, put the check with others to be deposited, and fill out the deposit slip.
Making the Deposit Make deposits in person, obtain deposit receipt.
Electronic Deposits Also called EFTs or electronic funds transfers.
Reconciliation Comparing the office financial records with the bank statement, ensure that they are consistent and accurate, preformed once a month.
electronic banking improves productivity, cash flow, and accuracy.
Computer software will record deposits, pay bills, display checkbook, reconcile the bank statement, check bank's safeguards.
Electronic banking guidelines Record deposits (enter each deposit and print deposit slip), pay bills (log checks, electronic bill pay) , and display checkbook (verify checks, check withdrawals, and check balance)
Balance Checkbook Program displays checks and deposits, mark those appearing on the statement, enter balance from statement, and program preforms the reconciliation.
What are the advantages of electronic banking? Improves productivity, cash flow, and accuracy. Computerized programs facilitate recording deposits, paying bills, displaying the checkbook and reconciliation of the account.
Three types of disbursements Payment for supplies, equipment, and practice-related products and services, payroll, taxes.
Disbursements Payment for goods or services.
Recording disbursements set up disbursement journal, enter check information and amount, determine expense category record check amount under appr category, spilt amount if necess. and enter total in check amount column.
Writing checks Account balance must cover the check, enter on disbursement log then write the check, have dr sign the check, mark invoice with date check number and amt paid, place copy in file, mail check.
Disbursement log total and track expenses by category, check calculations, tracking- look for changes and helps control expenses.
Understanding financial summaries Statement of income and expense, cash flow statement (shows money available to cover expenses)
Trial balance Check periodically, expenses should match amount in check column.
How do you record disbursements in a disbursement journal? enter check information and amount, determine expense category, record check amt under app. category, spilt amt if necessary and enter total in check amt column