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CMOM Module 3| with Questions & Correct Verified Answers
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CMOM Module 3| with Questions &Correct Verified Answers
Accrual Based Accounting - ✔-record income when the services occur, not when you
receive payment
-Record an expense when you receive goods or services, even though you may not pay for
them until later
Balance Sheet - ✔a financial picture of the practice at a specific point in time
Billing Cycle - ✔the period between billings for products and services
Capital - ✔money invested in the practice by owners
Capitated Income - ✔Payments made by contracted managed care that are made based
on covered lives
-per member per month (PMPM)
Cash Based Accounting - ✔-Record income only when you receive cash from
customers -record an expense only when you write the check to the vendor
Charge Off - ✔Accounts Receivable that will likely remain uncollectible and will be written
off as a collection or bad debt
-appears as an expense on a practice's income statement
Current Liabilities - ✔-payable within one year
-examples are accounts payable and payroll taxes payable
, Long Term Liabilities - ✔-What you owe creditors but is not due within one year
Depreciation - ✔An annual write-of of a portion of the cost of fixed assets, such as
vehicles and equipment
-listed among the expenses on income statement
Direct Expense - ✔expenses that are directly related to a cost center
Example: A radiology department requires film, technicians, x-ray equipment and maintenance.
Without a radiology department there would be no need for film or technicians
Period Expenses - ✔expenses incurred but paid over a period of time, such as mortgage
or loan payments
Fixed assets - ✔assets that are generally not converted to cash within one year, such
as equipment and vehicles
Fixed expenses - ✔expenses that do not vary with the volume of services, such as
rent, salaries, utilities and loan payments
Gross - ✔refers to the total amount made as a result of some activity, such as charges
or collections
Income Statement - ✔a record of the financial performance of a business over a period
of time
-it lists your income, expenses and net profit (or loss)
-Net profit (or loss) is equal to your net income minus your expenses
-also knows as a Profit and Loss Statement
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