1. Accounting Practices Chapter 21 ICBS 120

2. Computerized Systems The majority of medical offices are relying on accounting software packages to prepare financial records, such as ledgers and reports, and to retrieve patient information Medical office software packages have the capability of including the most common (CPT) and diagnostic (ICD-9) codes within a database to be recalled when completing insurance claim form or printing other computer-generated reports.

3. The Accounting Function Accounting is a system of monitoring the financial status of a facility and the financial results of its activities. Financial accounting provides information primarily for entities external to the organization such as the government Managerial accounting generates financial information that can enable more efficient internal management Cost Accounting helps to determine what it costs the clinic to perform particular services

4. Balance Sheet and Income Statement The balance sheet is an itemized statement of the assets, liabilities, and owner’s equity of a medical facility as of a specified date. The income statement shows the cumulative profit and total expenses for the month

5. Terminology Accounts receivable ratio – a formula that measures the speed in which outstanding accounts are paid Collected ratio – shows the percentage of outstanding debt collected Cost ratio – a formula that shows the cost of a procedure or service Accounts payable – unwritten promise to pay a supplier for property or merchandise purchased on credit or for a service rendered