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accounts payable
debts incurred and not yet paid
the amount of money owed by a business and not yet paid
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accounts receivable
amounts owed to the physician or business that are not yet paid
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accounts receivable trail balance
a method of determining that the journal and the ledger are in balance
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accrual basis of accounting
method of accounting in which income is recorded when earned and expenses are recorded when incurred
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assets
the entire property of a person , association , corporation or estate applicable or subject to the payment of debts
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balance sheet
a financial statement for a specific date that shows the total assets , liabilities , and capital of the business
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bookkeeping
the recording of business and accounting transactions
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cash basis of accounting
a method of accounting in which income is recorded when received and expenses are recorded when paid
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cash flow statement
a financial summary for a specific period that shows the beginning balance on hand , the receipts and disbursements during the period , and the balance on hand at the end of the period
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controls
a standard of comparison to make sure answers obtained are accurate
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disbursements journal
a summary of accounts paid out
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entry
a record or notation of an occurrence , transaction , or proceeding
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equities
the monetary value of a property or of an interest in a property in excess of claims or liens against it
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in balance
the state in which the total ending balances of patient ledgers equals the total of accounts receivable
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invoice
a paper describing a purchase and the amount due
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liabilities
things that are owed , debts
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petty cash fund
a fund maintained to pay small unpredictable cash expenditures
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statement
a request for payment
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statement of income and expense
a summary of all income and expenses for a given period
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subsidiary
supporting other documents or records
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trial balance
a method of checking the accuracy of accounts
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list four items all financial records should show at any given time
- how much was earned in a given period
- how much was collected
- how much is owed
- the distribution of expenses incurred
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the single-entry accounting system uses three basic records
general journal: day sheet
cash payment journal: simplest form a check
accounts receivable ledger
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single entry system
requires a entry on each side of the accounting equation and each side must always balance
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what is the importance of trial balance
reflect discrepancies between the journal and the ledger. it does not reveal errors in the individual accounts but shows errors in the overall balances of accounts
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five common reports are used for accounting in the small business office
- statement of income and expense
- cash flow statement
- trial balance
- accounts receivable trail balance
- balance sheets
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IRS requires that several employment records be kept for at least 4 years
- employee's social security number
- the number of withholding allowance claimed
- the amount of gross salary
- all deductions for social security and medicare taxes
- subdivision withholding taxes
- state disability
- state disability insurance
- state unemployment tax
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what is accounting
a system of recording , classifying , and summarizing financial transactions.
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daily journal
record of all transactions
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accounting systems
- single-entry
- double-entry
- pegboard or write-it-once( most common used)
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equity of the owner
also called capital , proprietorship , owner's equity
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