Florida Chiropractic Laws and Rules (FCLR) Practice Exam

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What are unearned fees received by a chiropractor prior to service known as?

Retainer fees
Trust funds
Advance payments
Deferred income

The correct answer is: Trust funds

Unearned fees received by a chiropractor prior to service are known as trust funds. Trust funds are amounts that are received by the chiropractor but not yet earned due to services not yet rendered. This aligns with the ethical and legal obligations outlined in chiropractic practice, as these funds must be correctly managed and segregated to ensure they are appropriately accounted for when the services are actually provided. By categorizing these fees as trust funds, practitioners demonstrate their commitment to financial transparency and ethical conduct. Mismanagement of trust funds can lead to serious legal repercussions and violations of both chiropractic laws and rules. It's essential that these funds be held separate from the chiropractor's operational funds until the services have been delivered. Other terms like retainer fees and advance payments imply a level of service or obligation that differs from the concept of trust funds in the context of chiropractic practice. Deferred income typically refers to income that is recognized at a later date, not specifically to funds received prior to service that are currently unearned. Thus, trust funds is the most appropriate term in this context.