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Acc/531 Week 4

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1. What is the function of working capital? The functions of working capital are to ensure an entity has enough working capital by turning long-term assets in services and revenue. This is done by obtaining cash from different resources (such as supplies and labor), arranging working cost, provision for credit sales and provision of a safety margin. 2. PPT slide 12. Exercise Pr.28 p. 248 (a,b,c). Trade credit discount. Compute the approximate annual interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations? a. 1/15 net 20 1% / 1-0.01% (99) = 0.0101 = 1.01% * 365/ 20-15= 73 = 0.737 = 73.7% b. 1/15 net 30 1% / 1-0.01% (99) = 0.0101 = 1.01% * 365/ 30-15= 24.33 = 0.246 = 24.6% c. 1/15 net 40 1% / 1-0.01% (99) = 0.0101 = 1.01% * 365/ 40-15= 14.6 = 0.147 = 14.7% …show more content…

3. Briefly describe the main steps in revenue cycle management. 1. Scheduling or preregistration: staff needs to collect as much information during this step to ensure demographics, insurance information, work status and ability to pay is up-to-date or correct. 2. Registration: depending the situation a patient may skip preregistration, therefore the staff must follow the same protocol and obtain as much information in the clinical area. This also a great opportunity to collect payment from the

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