Question 1

A fraction appearing in the upper-right corner 
of all printed checks that identifies the 
geographic area and specific bank on which 
the check is drawn.

Accepted Answer

ABA number 
(nŭm’bĕr)

Question 2

The process of communicating the income 
and expenses of a business and its 
financial health.

Accepted Answer

accounting (
ă-kownt’ing)

Question 3

Money owed by a business; 
the practice’s expenses.

Accepted Answer

accounts payable 
(A/P) (ă-kownts’ pā’ă-bĕl)

Question 4

Income or money owed 
to a business.

Accepted Answer

accounts receivable 
(A/R) (ă-kownts’ rĕ-sē’vă-bĕl)

Question 5

The process of clarifying and reviewing 
past-due accounts by age from the 
first date of billing.

Accepted Answer

age analysis 
(āj ă-nal’i-sis)

Question 6

The systematic recording of 
business transactions.

Accepted Answer

bookkeeping 
(buk’kēp’ing)

Question 7

A statement that shows the cash on hand 
at the beginning of a period, the income 
and disbursements made during the period, 
and the new amount of cash on hand at the 
end of the period.

Accepted Answer

cash flow statement 
(kash flō stāt’mĕnt)

Question 8

A bank draft or order written by a payer 
that directs the bank to pay a sum of 
money on demand to the payee.

Accepted Answer

check 
(chĕk)

Question 9

An extension of time to pay for 
services, which are provided on trust.

Accepted Answer

credit 
(krĕd’ĭt)

Question 10

A company that provides information about 
the creditworthiness of a person seeking 
credit.

Accepted Answer

credit bureau 
(krĕd’ĭt būr’ō)

Question 11

A system that sends invoices to groups of 
patients every few days, spreading the 
work of billing all patients over the month 
while billing each patient only once.

Accepted Answer

cycle billing 
(sī’kĕl bil’ing)

Question 12

A written description of agreed terms of 
payment; also called a federal Truth in 
Lending Statement.

Accepted Answer

disclosure statement 
(dis-klō’zhŭr stāt’mĕnt)

Question 13

Signature on the back of a check with the 
terms for accepting the check as payment.

Accepted Answer

endorsement 
(en-dōrs’mĕnt)

Question 14

The patient, caregiver, or entity responsible 
for payment of the healthcare bill.

Accepted Answer

guarantor 
(gar’ăn-tōr)

Question 15

The process of logging charges and receipts in 
a chronological list each day; used in the 
single-entry system of bookkeeping.

Accepted Answer

journalizing 
(jûr’nă-līz’ĭng)

Question 16

Legally transferable from 
one person to another.

Accepted Answer

negotiable 
(nĭ-gō’shē-ă-bel)

Question 17

An account that is open to charges 
made occasionally as needed.

Accepted Answer

open-book account 
(ō’pĕn buk ă-kownt’)

Question 18

A person who receives a payment.

Accepted Answer

payee 
(pā-ē’)

Question 19

A person who pays a bill or writes a check.

Accepted Answer

payer 
(pā’ĕr)

Question 20

The legal right to act as the attorney 
or agent of another person, including 
handling that person’s financial matters.

Accepted Answer

power of attorney 
(pow’ĕr ă-tŏr’nē)

Question 21

A comparison of the office’s financial records 
with bank records to ensure that they are 
consistent and accurate; usually done when the 
monthly checking account statement is received 
from the bank.

Accepted Answer

reconciliation 
(rĕ-kon-sil’ē-ā’shŭn)

Question 22

An account that has only one charge, usually 
for a small amount, for a patient who does 
not come in regularly.

Accepted Answer

single-entry account 
(sing’gĕl en’trē ă-kownt’)

Question 23

A patient who has moved without 
leaving a forwarding address and 
their bill is unpaid.

Accepted Answer

skip 
(skĭp)

Question 24

A state law that sets a time limit on 
when a collection suit on a past-due 
account can legally be filed.

Accepted Answer

statute of limitations 
(sta’chyūt lim’i-tā’shŭnz)

Question 25

A check made out to one recipient and 
given in payment to another, as with 
one made out to a patient rather than 
the medical practice.

Accepted Answer

third-party check 
(thĭrd-pahr’tē chĕk)

Question 26

Watching for changes in spending 
so as to help control expenses.

Accepted Answer

tracking 
(trăk’ĭng)

Question 27

A written description of the agreed terms 
of payment between the patient and medical 
practice when payment will be made in more 
than four installments.

Accepted Answer

Truth in Lending Statement 
(trūth lend’ing stāt’mĕnt)

Question 28

A manual bookkeeping system where the daily log 
has prepunched holes on the right or left side 
of the log. Prepunched charge sheets (of NCR 
paper) are placed in designated areas on top of 
the day sheet, which has been placed on the 
pegboard. The patient ledger card is placed 
between the day sheet and the charge sheet and 
an entry is made; it appears on all three 
documents at the same time.

Accepted Answer

write-it-once (pegboard) system 
(rīt it wŭns pĕg’bōrd sis’tĕm)

Question 29

An agreement between the physician and 
patient stating that the patient will 
pay a bill in more than four installments.

Accepted Answer

written-contract account 
(rĭ’ten kŏn’trăkt ă-kownt’)

MED254 MED OFF PRO 2

MED254 CH 20 KEY TERMS

DEFINITION	TERM
MED254 CH 20 KEY TERMS
A fraction appearing in the upper-right corner of all printed checks that identifies the geographic area and specific bank on which the check is drawn.	ABA number (nŭm’bĕr)
The process of communicating the income and expenses of a business and its financial health.	accounting ( ă-kownt’ing)
Money owed by a business; the practice’s expenses.	accounts payable (A/P) (ă-kownts’ pā’ă-bĕl)
Income or money owed to a business.	accounts receivable (A/R) (ă-kownts’ rĕ-sē’vă-bĕl)
The process of clarifying and reviewing past-due accounts by age from the first date of billing.	age analysis (āj ă-nal’i-sis)
The systematic recording of business transactions.	bookkeeping (buk’kēp’ing)
A statement that shows the cash on hand at the beginning of a period, the income and disbursements made during the period, and the new amount of cash on hand at the end of the period.	cash flow statement (kash flō stāt’mĕnt)
A bank draft or order written by a payer that directs the bank to pay a sum of money on demand to the payee.	check (chĕk)
An extension of time to pay for services, which are provided on trust.	credit (krĕd’ĭt)
A company that provides information about the creditworthiness of a person seeking credit.	credit bureau (krĕd’ĭt būr’ō)
A system that sends invoices to groups of patients every few days, spreading the work of billing all patients over the month while billing each patient only once.	cycle billing (sī’kĕl bil’ing)
A written description of agreed terms of payment; also called a federal Truth in Lending Statement.	disclosure statement (dis-klō’zhŭr stāt’mĕnt)
Signature on the back of a check with the terms for accepting the check as payment.	endorsement (en-dōrs’mĕnt)
The patient, caregiver, or entity responsible for payment of the healthcare bill.	guarantor (gar’ăn-tōr)
The process of logging charges and receipts in a chronological list each day; used in the single-entry system of bookkeeping.	journalizing (jûr’nă-līz’ĭng)
Legally transferable from one person to another.	negotiable (nĭ-gō’shē-ă-bel)
An account that is open to charges made occasionally as needed.	open-book account (ō’pĕn buk ă-kownt’)
A person who receives a payment.	payee (pā-ē’)
A person who pays a bill or writes a check.	payer (pā’ĕr)
The legal right to act as the attorney or agent of another person, including handling that person’s financial matters.	power of attorney (pow’ĕr ă-tŏr’nē)
A comparison of the office’s financial records with bank records to ensure that they are consistent and accurate; usually done when the monthly checking account statement is received from the bank.	reconciliation (rĕ-kon-sil’ē-ā’shŭn)
An account that has only one charge, usually for a small amount, for a patient who does not come in regularly.	single-entry account (sing’gĕl en’trē ă-kownt’)
A patient who has moved without leaving a forwarding address and their bill is unpaid.	skip (skĭp)
A state law that sets a time limit on when a collection suit on a past-due account can legally be filed.	statute of limitations (sta’chyūt lim’i-tā’shŭnz)
A check made out to one recipient and given in payment to another, as with one made out to a patient rather than the medical practice.	third-party check (thĭrd-pahr’tē chĕk)
Watching for changes in spending so as to help control expenses.	tracking (trăk’ĭng)
A written description of the agreed terms of payment between the patient and medical practice when payment will be made in more than four installments.	Truth in Lending Statement (trūth lend’ing stāt’mĕnt)
A manual bookkeeping system where the daily log has prepunched holes on the right or left side of the log. Prepunched charge sheets (of NCR paper) are placed in designated areas on top of the day sheet, which has been placed on the pegboard. The patient ledger card is placed between the day sheet and the charge sheet and an entry is made; it appears on all three documents at the same time.	write-it-once (pegboard) system (rīt it wŭns pĕg’bōrd sis’tĕm)
An agreement between the physician and patient stating that the patient will pay a bill in more than four installments.	written-contract account (rĭ’ten kŏn’trăkt ă-kownt’)

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