Financial Management and Accounting Flashcards
7 cards from real CMAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Accounting flashcards as text
Which financial practice helps prevent embezzlement in a medical office?
Answer: Using separation of duties so no single employee controls all steps of a transaction
Separation of duties divides financial tasks among multiple employees, reducing the opportunity for any one person to commit fraud undetected.
A medical office uses the accrual accounting method. When is revenue recognized?
Answer: When the service is rendered, regardless of payment receipt
Under accrual accounting, revenue is recorded when the service is provided, not when payment is actually received.
What does the term 'credit balance' mean on a patient's account?
Answer: The practice owes money back to the patient due to an overpayment
A credit balance indicates the patient (or insurer) has paid more than was owed, and the practice must issue a refund.
Which document itemizes every service, procedure code, diagnosis code, and charge for a patient visit?
Answer: Superbill (encounter form)
The superbill (encounter form) captures all clinical and billing details from a visit and serves as the source document for claim submission.
An insurance payment posts to the wrong patient account. What is the correct action?
Answer: Process a reversal and repost the payment to the correct account
A reversal corrects the misposted payment by removing it from the wrong account and reapplying it to the correct one, maintaining an accurate audit trail.
Which federal act requires medical practices to safeguard patients' financial and health information from unauthorized disclosure?
Answer: HIPAA
HIPAA's Privacy and Security Rules require covered entities to protect patients' individually identifiable health and financial information.
A practice's accounts receivable (A/R) days outstanding is 65 days. What does this indicate?
Answer: On average, it takes 65 days to collect payment after a service is rendered
A/R days outstanding measures the average number of days it takes to collect payment; 65 days is above the industry benchmark of 30–45 days and may signal billing inefficiencies.