You have been given the following list of accounts and cost centers for a group of physician offices that you manage. The accounts are in alphabetical order. Create a numbering system for a chart of accounts using a 5-digit numbering system that incorporates the main categories of Assets, Liabilities, Equity, Expenses, and Revenues. You will have sub-accounts under these main headings. You will have to determine if the accounts are considered Assets, Liabilities, Equity, Expenses, or Revenues and indicate that in your file. Provide the definition of each (15 of the 50 points). The cost centers represent the various physician office sites and will be indicated by a modifier. As an example (yours should look different), lets assume you have salaries as an expense. Your numbering system states that all expenses have a 5 digit code starting with 30. Salaries are considered expenses and expenses have to start with 30. There are various types of salaries and those would be indicated by 30-100 through 30-199. You could then breakdown salaries by type. such as clerical: 30-101 or physicians assistant: 30-102. You will indicate the three cost centers through a two digit modifier. So, a physicians assistant salary at the Bedford Clinic would be 30-102-01 and a physicians assistant salary at the Simon Clinic would be 30-102-02. Provide a detailed explanation of how you set up your chart of accounts. (10 of the 50 points) The following is the list of accounts and cost centers from which to create your numbering system. You are to create your chart of accounts in Excel. You may want to research some existing charts of accounts to see how to set them up. (25 of the 50 points) Accounts Cost Centers Accounts Payable-Loan Bedford Clinic Accounts Receivable-Patient Accounts Simon Clinic Cash - investment account Morgan Physician Group Cash - money market Coding expense Common stock Computer supplies expense (not including software) Dues expense - professional Medicare tax payable Office supplies expense Professional Consulting (PC) revenue Rent Expense Retained Earnings Salaries- management (exempt) Wages - staff (non-exempt) Follow-up Questions: Assume you have the following transactions. Indicate what account number (based on your numbering system) you would assign to that transaction.(5 points) Transaction Account Number Bedford Clinic paid for updates on their encoder software. Simon Clinic pays AHIMA dues for their managers Morgan Group received a dividend on their money market fund Simon Clinic billed 5 patients for services on 4/3/20xx Morgan Group paid clerical salaries Why is it important to establish a chart of accounts? Provide at least three examples of accounts that may be present in a hospital setting, but not in a physicians office setting. Explain why that would happen. (15 points) Here are two examples of ways to set up your chart of accounts. (You would need to add the Cost Center and make the numbers reflective of your chart of accounts) Example A: Account Listed First No. Account Title Category Description/Explanation 100 Cash Asset Checking account balance, currency, coins, checks received 200 Accounts Receivable Asset Amounts owed to the company 210 Notes Payable Liability Loans from a bank 290 Capital Equity Amount the owner invested in the company 310 Gift Shop Revenue Revenue Amounts earned from gift shop sales 501 Salaries Expenses Expenses incurred for work performed by salaried employees Example B: Category Listed First (similar to Exhibit 2-1 in your text) No. Financial Statement Element Subclassification Description/Explanation 100 Asset 101 Cash Checking account balance, currency, coins, checks received 102 Accounts Receivable Amounts owed to the company 200 Liability 210 Notes Payable Loans from a bank 200 Equity 290 Capital Amount the owner invested in the company 300 Operating Revenue 310 Gift Shop Revenue Amounts earned from gift shop sales 500 Expenses 501 Salaries Expenses incurred for work performed by salaried employees

HCMG 750