WELCOME TO SEMINAR 4 HS 240
WELCOME TO SEMINAR 4
HS 240
To Begin..
• Review
– Last week’s performance
– The Accounting Equation, Debit vs. Credit, and Journalizing Transactions
• Questions from last week’s material
Overview
• Accounting Equation– Assets = Liabilities + Net Assets
• Recording Financial Events
– Double entry transaction recording• Debit• Credit• Using T Accounts
– Chart of Accounts
• Ledgers
• Financial Statements
Financial Statements
• Assets = Liabilities + Net Assets
• Assets– To increase: Debit– To decrease: Credit
• Liabilities– To increase: Credit– To decrease: Debit
• Net Assets– To increase: Credit– To decrease: Debit
Financial Summaries and Records
• Financial Summaries– How much was earned in a given period.– How much was collected.– How much is owed.– The distribution of expenses incurred.
• Transactions • Double Entry System vs. Single Entry System
• Financial Records– Daily Journal– Checkbook– Disbursement Journal– Petty Cash Records– Payroll Records
Recording Transactions
• Single Entry System– Pros and Cons
• Double Entry System
• T-Accounts Cash A/P
Dr Cr Dr Cr + - - +
• Pegboard or Write-It-Once System
Applications
• Missing Checks
• Petty Cash
• Recording Errors
Financial Statements
• Trial Balances– Accounts Receivable
• Accounts Payable Summary– Paying for Purchase (Cash or Charge)
– Recording Disbursements
• Petty Cash Funds
• Payroll Forms and Summaries
Applications
• $150 Invoice for Supplies
• Purchased Building for $2,000,000
• Paid $600 for Semi-Annual Fire Insurance
• Paid $50 out of Petty Cash for Pizza
Recording Transactions
• Ledger Accounts
– Classified under the equationAssets+Expenses = Liabilities+Net Assets+Revenue
– Uses the double entry system
Beginning Balance +/- Transactions Ending Balance
Example
AssetsCash
ExpensesInventory
LiabilitiesA/P
Net AssetsUnrestricted
Revenue
BI 20,000 0 500 2000 0
T1 -500 1000 500
T2 Record a payment for Inventory payment on account.
EI 10,000 1000 0 2000 0
From the information provided, what do you think T2 would be?
Financial Statements
• Operating Statement (Statement of Income and Expenses)
• Revenue (Beginning Total)
– Less Expenses (List of paid bills)• Total your list of expenses
• = Increase or Decrease in Net Assets
• R – E = Increase or Decrease in NA
Financial Statements
• Trial Balance
• Balance of all the Patient Accounts– Pull all the balances for the beginning of the
month– Add total charges for the month– Subtract total payments from patients,
insurance carriers, etc. for the month– Equals accounts receivable for the end of the
month.
Financial Statement
• Statement of Cash Flows– Where the cash originates from and where it is
applied.
• Examples of Practice– Operating Activities– Investing Activities– Financial Activities
• Note: Cash balance on Balance Sheet must equal the ending cash balance on Statement of Cash Flows
Exercise
• Revenue from patient A: $25.00
• Revenue from patient B: $50.00
• Write-Off from insurance carrier for patient A: $250.00
• Office Visit Charge for patient B: $300.00
• Beginning Balance Patient A: $200.00• Beginning Balance Patient B: $325.00
What is accounts receivable for the end of the month?
Summary
• Accounting Equation
• Changes in the Accounting Equation
• T-Accounts
• Debit vs. Credit
• Transactions
Payroll
• Payroll Forms– W-4– W-2– SS-4
• Income Tax Withholding of Employer– Employer responsible for estimates
• Income Tax Withholding of Employee– Employee responsible
Payroll
• Social Security, Medicate and other Taxes– Employer
• Medicare• Medicaid
– Employee• Medicare
• Medicaid
• State and Local Taxes
– Tax forms• Form 941: Quarterly Federal Tax Return
• Form 940: Employer’s Annual Federal Unemployment Tax Return
• W-2• W-3
Budgets
• Fiscal Year Basis
• Budget Designs– Budget– Actual– Differences– Accounts to Include
Summary
• Financial Summaries and Statements
• Financial Records
• Record Keeping Systems
• Payroll
Conclusion
• Never hesitate to contact me on AIM during office hours, or by my Kaplan email.– AIM: drtlbolling– [email protected]
• Any final questions or thoughts?