What accounting practices should be applied to
transactions in preparation for an adjusted trial balance?
This assignment helps you apply your
knowledge from this week’s modules and readings.
As future managers in the healthcare
setting, it is important that graduates understand when making financial
decisions for a practice or facility you should be guided by the business’s
present financial status and future goals. Reading and interpreting
financial data is critical to getting an accurate accounting of the current
condition of the organization.
55
Basic Vocabulary
Answer the following questions.
1. Match the terms below with the definations
provided:
A. Credit
B. Ledger
C. Debit
D. Trial balance
E. Account
F. Charts of accounts
G. Double-entry accounting
___.
A detailed record of
increases and decreases; is a specific asset, liability, equity, revenue, or
expense. Information from this is
analyzed, summarized and presented in reports and financial statements.
___.
Is a record
containing all accounts used by a company and their balances; it is referred
to as “the books”
___.
A list of all
accounts and usually includes an identification number assigned to each
account
___.
Refers to left;
increase: assets, expenses and withdrawals
___.
Refers to right;
increase: liabilities, owner capital and revenues
___.
Each transaction
affects at least two accounts; has at least one debit and one credit
___.
A list of accounts
from the ledger showing their debit or credit balance in separate
columns. A summary of the ledger’s
contents; is useful in preparing financial statements and in revealing
recordkeeping errors
2. Match the terms below with the definations
provided:
A. Accrued
expenses
B. Accrued
revenues
C. The
time period assumption
D. Accrual
basis accounting
E. Profit
Margin
F. Prepaid
expenses
G. Unearned
(or prepaid) revenues
___.
Recognized revenue
when earned and expenses when incurred – not necessarily when cash inflows
and outflows occur. This information
is valuable in assessing a company’s financial position and performance.
___.
Refers to revenues
earned in a period that are both unrecorded and not yet received in cash.
Adjusted entries involve increasing (debiting) assets and increasing
(crediting) revenues.
___.
Refers to items paid
for in advance of receiving their benefits.
Are assets. Adjusting entries
involve increasing (debiting) expenses and decreasing (crediting) assets.
___.
The reporting
period’s net income divided by its net sales; reflects on a company’s
earning activities by showing how much income is in each dollar of sales.
___.
Refers to cash
received in advance of providing products and services; are liabilities;
adjusting entries involve increasing (crediting) revenues and decreasing
(debiting) unearned revenue.
___.
Refers to costs
incurred in a period that are both unpaid and unrecorded. Adjusting entries involve increasing
(debiting) expenses and increasing (crediting) liabilities.
___.
Presumes that an
organization’s activities can be divided into specific time periods for
periodic reporting.
Analyzing and Recording Transactions
Answer the following
questions.
3. Assign the correct order for analyzing and recording transactions:
A. Step 1
B. Step 2
C. Step 3
D. Step 4
___.
Post journal
information to ledger accounts.
___.
Prepare and analyze
the trial balance.
___.
Record relevant
transactions and events in journal.
___.
Presumes that an
organization’s activities can be divided into specific time periods for
periodic reporting.
4. Classify the following accounts either as an “asset”, “liability”
or “equity”:
A. Asset
L. Liability
E. Equity
___.
Owner’s capital
___.
Unearned revenue
___.
Buildings
___.
Medical Equipment
___.
Cash
___.
Medical Supplies
___.
Accounts Payable
___.
Owner’s withdrawals
___.
Prepaid Accounts
___.
Accounts receivable
___.
Accrued Liabilities
___.
Inventory
___.
Revenues
___.
Short-term notes payable
___.
Expenses
Recording Transactions, Using Journals and T-accounts
Answer the following questions.
5. Assume the following T-accounts reflect Belle Co.’s general ledger
and its first seven transactions, a through g, which are posted to
them. Identify the explanation from 1
through 7 below that best describes each transaction a through g
reflected in the T-accounts, and enter that letter in the blank space in front
of each numbered explanation.
Cash
(a)
6,000
(b)
4,800
(e)
4,500
(d)
800
(f)
900
(g)
3,400
Web Servers
(a)
12,000
Accounts Payable
(f)
900
(c)
900
Supplies
(c)
900
Dr. Belle, Capital
(a)
25,600
Prepaid Insurance
(b)
4,800
Services Revenue
(e)
4,500
Selling Expenses
(d)
800
Cash
(a)
7,600
(g)
3,400
___.
The company paid $4,800 cash in advance for prepaid insurance
coverage.
___.
Dr. Belle created a new business and invested $6,000 cash, $7,600
of equipment, and $12,000 in web servers.
___.
The company purchased $900 of supplies on account.
___.
The company received $4,500 cash for services provided.
___.
The company paid $900 cash toward accounts payable.
___.
The company paid $3,400 cash for equipment.
___.
The company paid $800 cash for selling expenses.
Debt Ratio and Profit Margin Calculations
Answer the following
questions.
6. Picture Perfect Physicians has total assets of $385, 000. Its total
liabilities are $100, 000 and its equity is $285, 000. Calculate the debt
ratio.
Type answer here
7. AAA Regional Hospital had $9,000,000 in net income for the year.
Its net sales were $13,200,000 for the same period. Calculate its profit
margin.
Type answer here
Reflection
Reflect on what you have
learned this week to help you respond to the question below. You may
choose to respond in writing or by recording a video!
8. Financial statements provide information about the financial
position, performance and changes in the financial position of the
organization. As a Healthcare Manager, would Accounts Receivable affect the
bottom line and how would you prevent loss of income??
Type answer here
Recent Comments