Review the budget below and answer the questions following the budget.
FINANCIAL ACCOUNTING—STATEMENT OF REVENUE AND EXPENSES Statement of Revenue and Expenses for Group Practice for Year Ending June 30, 2006
REVENUE
Patient service revenue $9,345,600
Less: Contractuals $3,364,200
Total Net Service Revenue $5,981,400
EXPENSES
Salaries $2,628,500
Fringe benefits $670,268
Temporary labor $150,000
Office supplies $78,000
Mortgage payments $195,000
Maintenance $32,900
Minor equipment $47,500
Insurance $36,200
Interest $23,200
Depreciation $178,000
Miscellaneous $15,000
Total Expenses $4,054,568
Net Income (profit/loss)
Excess Revenue
Over Expenses $1,926,833 32.21%
1. Another name for the statement of revenue and expenses financial accounting report is the statement of cash flows.
a. True
b. False
2. Assess the information presented in the medical group statement of revenues and expenses and calculate the operating margin for fiscal year 2006.
3. Although not included in the medical group practice statement of revenues and expenses, other forms of operating revenue might include interest from investments, research grants, or gifts and donations.
a. True
b. False
4. Describe two different types of accounting, the various activities that makes each unique, and the primary users of each accounting type.
5. You have just started a new job and will be leading organization-wide revenue cycle operations for a 300-bed hospital that employs 60 physicians in a multi-specialty group practice. List and describe at least six individual revenue cycle processes you will evaluate, how each affects organizational financial performance, and what information you will use in your evaluation.