Ch. 9 Office Procedures

true/false. A medical practice is a business and must produce a profit.

true

true/false. A charge slip is the organical record of the doctors services and the charge for those services.

true

true/false. A check from an insurance company includes payment for only one patient.

false

true/false. The person who writes a check is called the payee.

false

true/false. Power of attorney gives someone the legal right over financial matter for one who is too sick to do so.

true

true/false. A bank will never accept a list of deposited items on something other than the bank provided deposited slip, even if the bank’s deposit slip is attached.

false

true/false. Reconciliation is usually performed once a month.

true

true/false. When reviewing the electronic checkbook register, change any information that is not correct.

true

true/false. The balance checkbook function electronically reconciles the monthly bank statement.

true

true/false. Compounded interest is paid on the initial investment and on the interest earned on the investment.

true

true/false. For employers, retirement plans can raise business taxes.

false

true/false. The payer is the person who will receive the payment.

false

true/false. Do not accept a third-party check unless it is from the health insurance company.

true

true/false. Vesting means that you have a legal right to all the money in your account.

true

true/false. If you terminate employment, you do not have to transfer or roll over the funds in your 401(K) account to an Individual Retirement Account.

true

true/false. A daily log includes the patient’s name, address, home and work telephone number, and the name of the person who is responsible for charges.

false

true/false. It is important to use the daily log sheet when organizing the practice’s bookkeeping system.

false

true/false. A lost bank deposit receipt could cost a medical practice thousands of dollars.

true

true/false. Never accept a check marked payment in full unless it actually pays the complete outstanding balance.

true

true/false. Paid vacations, paid holidays, and disability and life insurance are examples of employee benefits.

true

true/false. Basic accounting involves managing accounts receivable and accounts payable.

true

true/false. In a medical practice, accounts receivable describes the money that is paid out to run the practice.

false

true/false. Accounts payable represents the money patients owe in return for medical services.

false

true/false. The fee schedule shows the charges for service provided the practice.

true

true/false. A usual fee is the average fee charged for a service or procedure by comparable doctors in the same area.

false

true/false. A customary fee is the fee a doctor charges for a service or procedure.

false

true/false. There is a growing tendency to determine fees by national rather than regional trends.

true

true/false. Encourage patients to pay by credit card.

false

true/false. The credit card company deducts a percentage of each patient charge for its collection service.

true

true/false. It is becoming more common that medical practices do not accept any insurance.

false

true/false. TRICARE operate differently from other insurers.

true

true/false. With cycle billing, you send invoices to a group of patients every few days.

true

true/false. It is acceptable to threaten to send a patient’s account to collections even if you are not ready to do so.

false

true/false. Once an agency has taken over an unpaid account, there should be no more correspondence between the physican’s office and the patient about the account

true

true/false.A class action lawsuit is a lawsuit in which one or more people sue a company that wronged all of them in the same way.

true

true/false. A fine is money paid as punishment for intentionally breaking the law.

true

true/false. To protect the practice from lost income because of nonpayment, the practice may buy accounts receivable insurance.

true

true/false. A physician would never extend credit to patient who is unable to pay because of high medical bills

false

true/false. If a payment agreement between the patient and physician includes more than four payments, it is not regulated by the Truth in Lending Act.

false

true/false. Free treatment for hardship cases is at the physican’s discretion.

true

true/false. Most practices try to reduce expenses by controlling accounts payable.

true

true/false. The physician usually authorizes several people to handle the purchasing of supplies and other products.

false

true/false. An employer identification number is required by law from every employer for federal tax accounting purposes.

true

true/false. Federal unemployment tax is a deduction from employees’ paychecks.

false

true/false. A physician would have a lower unemployment tax rate than an industry would.

true

true/false. The purpose of the petty cash fund is to avoid writing checks for small amounts.

true

true/false. Hourly wage x hours worked = net earnings.

false

true/false. The Fair Labor Standards Act requires overtime payments for part time hourly employees for every hour worked beyond the normal eight hours in a day or 40 hours in a week.

true

true/false. The law requires all employers to withhold money from employees’ net earnings to pay federal, state, and local income taxes.

false

true/false. Have all employees update their W-4 forms once a year.

true

true/false. The percentage the employer pays for federal unemployment taxes decreases if the employer also pays state unemployment taxes

true

true/false. The employee’s gross earnings are his take home pay.

false

true/false. Net earnings - total deductions = gross earnings.

false

true/false. If your practice is not required to use EFT, you must submit employment taxes with a Federal Tax Deposit Coupon.

true

true/false. An employer must pay FUTA tax if employees’ wages total more than $1500 in any quarter.

true

true/false. A Federal Unemployment Tax Return is also called Form W-4.

false

true/false. A common disbursement for a physician’s office is payment for equipment.

true

true/false. When ordering supplies, it is better to buy too little and reorder more frequently than to buy too much.

false

true/false.If your office does only a few throat cultures a year, it makes more sense to send those patients elsewhere for the test than to stock the supplies required.

true

true/false. You may purchase holiday decorations from the petty cash fund.

true

All patient’s financial accounts should be brought up to date

at the time the patient is being discharged

Payments made by a patient represent the doctor’s

accounts receivable

The patient’s ledger card has the function of serving as

all of the above

The Federal Communications Commission public notice governing the use of the telephone for collections prohibits

all of the above

FICA provides for which of the following:

1. social security benefits

2. unemployment compensation

3. old age benefits

4. workman’s compensation

1 and 3

The Employees Withholding Exemption certificate is also called

W-4

The amount of Social Security which is deducted from an employee’s paycheck is based on

a percentage of the gross pay

The Employee’s Withholding Exemption Certificate must be filled out by the

employee

The main source of communication between the doctor and the public is the

the telephone

An ABA number

identifies a check and the bank it is written on

A bank statement is reconciled with

the depositor’s check book

The payee is not guaranteed payment if the check received is a

personal check

The term CURRENT ASSETS often refers to

assets that can readily converted to cash

Dollar entries made on the left side of the ledger are called

debits

An endorsement of a check appears as the

signature of the payee on the back of a check

Any checks received for the doctor should be immediately

given a restrictive endorsement

All disbursements, regardless of purpose, should be

made by check

A rubber stamp may be used for

restrictive endorsements

The fee a doctor most frequently charges for a given procedure is called

usual fee

The patient’s ledger should be kept

in a separate ledger file

An employee payroll sheet is also termed as a

compensation record

The process of recording all the details of a transaction in the daily journal before an entry is made in the general ledger is known as

journalizing

The basic forms which comprise the pegboard bookkeeping system are

daybook sheet, patient ledger card, and charge slip

Pegboard posting is often referred to as which of the following systems?

write it once

Business reply mail is an example of

first class mail

Newspapers and periodicals are sent by

second class mail

First class mail with valuable contents should be sent

registered mail

Packages and printed matter weighing more than 16 ounces are sent by

fourth class mail

Fourth class mail is also known as

parcel post

The least expensive way of shipping heavy and bulky goods is by

freight

The straight telegram is a message of

15 words

How often is the physician’s narcotic license renewed?

every 3 years

If a patient who has complained of chest pain collapses in the office

be sure the patient is breathless and pulseless before administering CPR

A patient calls in to the office and states they have received a blunt injury to the eye. You should advise to

come in as soon as possible to have the eye checked

The balancing of the monthly bank statement with the checkbook is referred to as

reconciling the bank statement

An aging of the accounts receivable analysis

is used to identify collection problems

All payments ‘

All payments received are referred to as

gross income

A system in which the money charged is not considered income until the money is received is called

accrual basis

A patient’s financial account is referred to as

ledger or ledger card

On the ledger card, the adjustment column is used for

refunds or charge corrections