Ch. 9: Office Procedures

T/F A medical practice is a business and must produce a profit.

true

T/F A charge slip is the original record of the doctors services and the charge for those services.

true

T/F A check from an insurance company includes payment for only one patient.

false

T/F The person who writes a check is called the payee.

false

T/F Power of attorney gives someone the legal right over financial matters for one who is too sick to do so.

true

T/F A bank will never accept a list of deposited items on something other than the bank provided deposit slip, even if the bank's deposit slip is attached.

false

T/F Reconciliation is usually performed once a month.

true

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

true

T/F The balance checkbook function electronically reconciles the monthly bank statement.

true

T/F Compounded interest is paid on the initial investment and on the interest earned on the investment.

true

T/F For employers, retirement plans can raise business taxes.

false

T/F The payer is the person who will receive the payment.

false

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

true

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

true

T/F 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

T/F 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

T/F It is important to use the daily log sheet when organizing the practice's bookkeeping system.

false

T/F A lost bank deposit receipt could cost a medical practice thousands of dollars.

true

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

true

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

true

T/F Basic accounting involves managing accounts receivable and accounts payable.

true

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

false

T/F Accounts payable represents the money patients owe in return for medical services.

false

T/F The fee schedule shows the charges for service provided by the practice.

true

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

false

T/F A customary fee is the fee a doctor charges for a service or procedure.

false

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

true

T/F Encourage patients to pay by credit card.

false

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

true

T/F It is becoming g more common that medical practices do not accept any insurance.

false

T/F TRICARE operate differently from other insurers.

true

T/F With cycle billing, you send invoices to a group of patients ever few days.

true

T/F It is acceptable to threaten to send a patient's account to collections even if you are not ready to do so.

false

T/F Once an agency has taken over an unpaid account, there should be no more correspondence between the physician's office and the patient about the account.

true

T/F 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

T/F A fine is money paid as punishment for intentionally breaking the law.

true

T/F To protect the practice from lost income b/c of nonpayment, the practice may buy accounts receivable insurance.

true

T/F A physician would never extend credit to a patient who is unable to pay b/c of high medical bills.

false

T/F If a payment agreement between the patient and physician includes more than 4 payments, it is not regulated by the Truth in Lending Act.

false

T/F Free treatment for hardship cases is at the physician's discretion.

true

T/F Most practices try to reduce expenses by controlling accounts payable.

true

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

false

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

true

T/F Federal unemployment tax is a deduction from employees' paychecks.

false

T/F A physician would have a lower unemployment tax rate than an industry would.

true

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

true

T/F Hourly wage x hours worked = net earnings

false

T/F 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

T/F The law requires all employers to withhold money form employees' net earnings to pay federal, state, and local income taxes.

false

T/F Have all employees update their W-4 forms once a year.

true

T/F The percentage the employer pays for federal unemployment taxes decreases if the employer also pays state unemployment taxes.

true

T/F The employee's gross earnings are his take home pay.

false

T/F Net earnings - total deductions = gross earnings

false

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

true

T/F An employer must pay FUTA tax if employees' wages total more than $1500 in any quarter.

true

T/F A Federal Unemployment Tax Return is also called Form W-4.

false

T/F A common disbursement for a physician's office is payment for equipment.

true

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

false

T/F 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

T/F 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 discharged

Payments made by a patient represent the doctor's

accounts receivable

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

a. a complete financial record of his charges, payments, and balance

b. an itemized statement

c. a record of all visits

d. all of the above

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

a. calling at add hours

b. repeated calls to the debtor

c. calls to employers

d. 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

a. 1 and 3

b. 2

c. 4

d. 2 and 4

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 a 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 be 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 good is by

freight

The straight telegram is a message of

15 words

How often is the physician's narcotic license renewed?

annually

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 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