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. 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. How to determine if the accounts are considered Assets, Liabilities, Equity, Expenses, or Revenues and indicate that in your file. Provide the definition of each. The cost centers represent the various physician office sites and will be indicated by a modifier.

For example, let's assume you have salaries as an expense. Your numbering system states that all expenses have a 5 digit code starting with 30. Salaries would be indicated by 30100. You could then breakdown salaries by type such as clerical: 30101 or physician's assistant: 30102. You will indicate the three cost centers through a two digit modifier. So, a physician's assistant salary at the Bedford Clinic would be 30102-01 and a physician's assistant salary at the Simon Clinic would be 30102-02. Provide an explanation of how you set up your chart of accounts. (10--includes definitions and explanation)

The following is the list of accounts and cost centers from which to make numbering system. How to make achart of accounts in Excel. You may want to research some existing charts of accounts to see how to set them up. (40)

Accounts

Cost Centers

Accounts payable - general

Bedford Clinic

Cash - investment account

Simon Clinic

Cash - money market

Morgan Physician Group

Coding expense

Collection agency income

Common stock

Computer supplies

Dues - professional

Medicare tax payable

Office supplies

Professional (PC) billing revenue

Retained earnings

Salaries - management

Salaries - staff

Essay Questions:

1. Why is it important to establish a chart of accounts? Provide at least three examples of accounts that may be present in a physician office setting, but not in a hospital setting. Explain why that would happen. (20)

Here are two examples of ways to set up your chart of accounts.

60000

Assets

60100

Bonds

Assets

60100

Bonds

60200

Stocks

Assets

60200

Stocks

70100

Reserves

Liabilities

70000

Liabilities

70100

Reserves