Accounting Chp 16

Front 1

What are quick assets?

Back 1

Assets that can be converted quickly and directly to cash

Front 2

Define cash. Are postage stamps, postdated checks,and employee IOUs properly included in "cash"? If not, how should they be classified in the balance sheet?

Back 2

Cash is defined as consisting of actual money and other immediately available resources

Postage stamps are concidered a supply; postdated checks and IOUs are treated as receivables

Front 3

For what reasons are bank reconciliations prepared? By whom should bank reconciliations be prepared?

Back 3

Aid in the prevention and detection of fraud

Should be prepared by someone who doesnt handle cash

Front 4

Explain how you would determine the appropriate imprest amount with which to establish petty cash fund?

Back 4

Determined by studying petty cash disbursements

Front 5

Under what circumstances is the petty cash account debited or credited?

Back 5

nowhere in the reimbursement process, only done if the imprest amount changes

Front 6

Name 3 methods by which bad debts may be estimated for accrual basis accounting purposes. Which is best?

Back 6

1. Application of a percentage, based on past experience, to the balance of accounts receivable
2. Application of a percentage, based on past experience, to the total of charges to patients
3."Aging the accounts receivable"

Hospitals employ all 3 methods

Front 7

Describe briefly some of the procedures that should be observed to maintain effective internal control over receivables.

Back 7

Control begins at the admitting process; once a patient is admitted, the system should provide a high assurance that all billable services rendered are accurately charged

Front 8

Identify and explain the nature of three deductions that may be made to arrive at a balance sheet valuation for accounts receivable.

Back 8

1.Bad debts (uncollectible)
2.Contractual adjustments (3rd party discounts)
3.Charity service (charity)

Front 9

Define the term temporary investments.

Back 9

Investments of temporary excessive cash balances; CDs, Treasury bills, bank savings accounts

Front 10

Briefly describe the imprest system for operating a petty cash fund and state the principal advantages of the imprest system from the standpoint of internal control.

Back 10

Imprest funds are established in a fixed amount, the fixed amount insures that in the event of theft only the fixed amount is lost