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The following transactions occurred during the year in the records of Quality Medical Clinic:

(a) Billed patients for fees for medical services.
1. No effect
2. No effect
(b) Received payment from patients for accounts received.
1. Increase
2. Increase
(c) Bought equipment which will last ten years.
1. Decrease
2. Decrease
(d) Paid wages to employees.
1. Decrease
2. Decrease
(e) Bought supplies on credit.
1. Increase
2. No effect
(f) Paid electricity bill.
1. Decrease
2. Decrease
(g) Replaced chairs in the waiting room.
1. Decrease
2. Decrease
(h) Billed the government direct for pensioner patients.
1. No effect
2. No effect
(i) Paid insurance in advance for the next year.
1. Decrease
2. No effect
(j) Used bandages and other supplies.
1. Decrease
2. Increase

Required:
Indicate the effect (increase, decrease or no effect) on net (1) cash flow and (2) operating profit

2007-09-26 14:03:55 · 1 answers · asked by SHINOBI 1 in Business & Finance Other - Business & Finance

1 answers

(a)Billed patients for fees for medical services.
1.) No effect
2.) Increase (credit is to fees revenue)
(b)Received payment from patients for accounts receivable.
1. Increase
2. No effect (credit is to accounts receivable)
(c)Bought equipment which will last ten years.
1. Decrease
2. Decrease (via depreciation)
(d)Paid wages to employees.
1. Decrease
2. Decrease
(e)Bought supplies on credit.
1. No effect (you haven't paid yet)
2. No effect (assuming supplies are not immediately used up)
(f)Paid electricity bill.
1. Decrease
2. Decrease
(g)Replaced chairs in the waiting room.
1. Decrease
2. Decrease (via depreciation or if chairs were expensed off due to immateriality)
(h)Billed the government direct for pensioner patients.
1. No effect
2. Increase (credit is to fees revenue)
(i)Paid insurance in advance for the next year.
1. Decrease
2. No effect
(j)Used bandages and other supplies.
1. No effect (the supplies were already there. You didn't only just pay for them)
2. Decrease (when you use up supplies, you debit expenses and credit supplies)

2007-09-26 18:28:38 · answer #1 · answered by Sandy 7 · 0 0

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