1. WELCOME TO SEMINAR 4 HS 240

2. To Begin.. Review –Last week’s performance –The Accounting Equation, Debit vs. Credit, and Journalizing Transactions Questions from last week’s material

3. 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

4. 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

5. 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

6. Recording Transactions Single Entry System –Pros and Cons Double Entry System T-Accounts Cash A/P Dr Cr DrCr + - - + Pegboard or Write-It-Once System

7. Applications Missing Checks Petty Cash Recording Errors

8. Financial Statements Trial Balances –Accounts Receivable Accounts Payable Summary –Paying for Purchase (Cash or Charge) –Recording Disbursements Petty Cash Funds Payroll Forms and Summaries

9. 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

10. Recording Transactions Ledger Accounts –Classified under the equation Assets+Expenses = Liabilities+Net Assets+Revenue –Uses the double entry system Beginning Balance +/- Transactions Ending Balance

11. Example Assets Cash Expenses Inventory Liabilities A/P Net Assets Unrestricted Revenue BI20,000050020000 T1-5001000500 T2Record a payment for Inventory payment on account. EI10,0001000020000 From the information provided, what do you think T2 would be?

12. 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

13. 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.

14. 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

15. 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?

16. Summary Accounting Equation Changes in the Accounting Equation T-Accounts Debit vs. Credit Transactions

17. 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

18. 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

19. Budgets Fiscal Year Basis Budget Designs –Budget –Actual –Differences –Accounts to Include

20. Summary Financial Summaries and Statements Financial Records Record Keeping Systems Payroll

21. Conclusion Never hesitate to contact me on AIM during office hours, or by my Kaplan email. –AIM: drtlbolling –tbolling@kaplan.edu Any final questions or thoughts?