Health Care Finance: Basic Tools for Nonfinancial Managers 4th Edition

1) The manager with a clinical viewpoint generally: A. May be responsible for service delivery B. May have direct interaction with patients C. Is responsible for clinical outcomes D. All of the above Answer: D Answer: D Answer: D 2) Operating budgets generally deal with: A. long-term revenues B. short-term expenses C. the next year (a 12-month period) D. all of the

1) In the case of purchasing equipment, the purchase could take place by A. Financing all of the purchase B. Paying cash for all of the purchase C. Financing only part of the purchase D. All of the above E. None of the above Answer: D Answer: D Answer: D 2) If departments are designated as cost centers, reports

1) The Midtown General Hospitals financial committee agenda includes planning questions about the old building that houses the hospitals laundry operation. Which of the following alternatives should the committee members consider? A. Keep the existing laundry building in its present condition B. Renovate the existing old building and replace the laundry equipment C.

1) Borrowing from investors assumes the organization: A. Has the proper legal structure to do so B. Is large enough to do so C. Has previously borrowed from investors D. Has previously borrowed from one or more lending institutions E. A & B F. A & C G. A & D Answer: E Answer: E Answer: E 2) Dr. Gray, Chairman

1) Revenue amounts estimated to be uncollectible are: A. Considered to be deductions from revenues B. Are recorded on the organizations books as deductions from revenue C. Considered to be part of the revenue stream D. Are never recorded on the organizations books E. A & B F. C & D Answer: E Answer: E Answer: E 2) In the

1) CMS identified three types of individuals who would require training on ICD-10, including physicians, coders and code users. Answer: True Answer: True Answer: True 2) Flowsheets are useful because they portray who is responsible for what piece of information as it exits the system. Answer: False Answer: False Answer: False 3)

1) The net book value of a fixed asset is computed as follows: subtract the Reserve for Depreciation from the original cost of the fixed asset. Answer: True Answer: True Answer: True 2) Within the planning cycle and process flow, broad goals become narrower objectives, and narrower objectives become detailed vision statements, Answer:

1) In healthcare organizations, it is not very common to find departments as cost centers. Answer: False Answer: False Answer: False 2) Capital expenditure budgets can cover a five- to ten-year period because they may take a futuristic view. Answer: True Answer: True Answer: True 3) The capital expenditure budget may sometimes

1) Forecasts are: A. Future financial statements B. Considered to be prospective C. Both of the above D. Neither of the above Answer: C Answer: C Answer: C 2) The evaluation process can be more manageable if one chosen method is uniformly used to evaluate: A. The return on investment B. The payback period C. Both of the above D. Neither of

1) When grouping accounts for planning or control, it is permissible to classify revenues by either service line or disease management category. Answer: True[/cpmembership] Answer: True[/cpmembership] Answer: True[/cpmembership] 2) One output from the clinical and financial data repository is insurance verification for patients through an electronic data information link to insurance

1) On the present value table in this textbook, the interest rate is found on the horizontal columns and the number of years in the period is found on the vertical columns. Answer: True Answer: True Answer: True 2) Regarding cash flow reporting methods, the "net present value" method is a discounted

1) The actual cost is attached to staffing in the books and records through the: A. general ledger B. basic transaction record C. check register Answer: B Answer: B Answer: B 2) The term revenue represents: A. Amounts earned by an organization B. Amounts expended by an organization C. The excess of cash remaining after disbursements D. None of the above Answer:

1) The Executive Summary should tell the entire story of the business plan in a compelling manner. It is recommended that it not be longer than four to six pages. Answer: False Answer: False Answer: False 2) A for-profit or proprietary company may be able to retain the excess of revenues

1) External reporting to third parties in health care (depending upon type of reporting organization) may include reporting to: A. Stockholders B. Government entities C. Health plan payers D. A & B E. A & C F. B & C G. All of the above Answer: G Answer: G Answer: G 2) Using the information provided in the preceding question, is

1) Another term for responsibility center is: A. Profit center B. Cost object C. Allocation center D. Neither of the above Answer: A Answer: A Answer: A 2) The contribution margin computation: A. Allows fixed, variable and semivariable cost classifications B. Requires either fixed or variable cost classifications C. Neither of the above Answer: B Answer: B Answer: B 3) To calculate a quick ratio,

1) Two modifications of the International Classification of Diseases, 10th Revision (ICD-10) have been developed in the United States. One is a clinical modification that is called the "ICD-10-PCS". The other is a procedure classification system that is called the "ICD-10-CM". Answer: False Answer: False Answer: False 2) The product cost concept

1) Using what you have learned about finance to date, is the contribution margin the same as the operating margin? A. Always B. In some circumstances C. Never D. Not applicable Answer: C Answer: C Answer: C 2) Liabilities are: A. Economic obligations B. What the organization owns C. Debts that are payable D. What the organization owes E. A & C F. B

1) Annuities are insured by the Federal Insurance Deposit Corporation (FDIC). Answer: False Answer: False Answer: False 2) An Appendix to the business plan (although optional) should always contain detail that adequately supports selected contents in the main part of the business plan. Answer: True Answer: True Answer: True 3) The FDIC

1) In cash basis accounting, revenue is recorded when it is earned and expenses are recorded when they are incurred. Answer: False Answer: False Answer: False 2) Regarding capacity level issues in forecasting, the ability to provide services is automatically limited by the availability of both space and the proper required

1) Menu objectives are mandatory while core objectives provide a choice for the provider. Answer: False Answer: False Answer: False 2) The unadjusted rate of return method results in a precise answer. Answer: False Answer: False Answer: False 3) The net book value of a fixed asset represents the remaining depreciated portion

1) Productive time relates to time spent performing functions that are specified in that employees job description. Julie works in the Medical Records department. She is the junior member of the Medical Records staff. Because the department is currently somewhat overstaffed (an uncommon occurrence), Julie has begun spending two afternoons

1) Mixed costs may include: A. utilities B. repairs C. telephone expense D. maintenance E. all of the above F. none of the above Answer: E Page 69 Answer: E Page 69 Answer: E Page 69 2) Productive time is: A. Paid-for time on duty B. Paid-for time not on duty C. Paid-for time performing job description functions D. All of the above E. None

1) The EHR Incentive Medicare program payments to a specific eligible hospital will cover a period of how many years? A. Two years B. Three years C. Four years D. Five years E. None of the above Answer: C Answer: C Answer: C 2) The amount owed to vendors: A. Is a liability B. Is recognized as accounts payable C. Is recognized

1) The purpose of controlling is to: A. Ensure that plans are being followed B. Ensure effective resource use C. Identify objectives D. A & B E. A & C F. B & C G. All of the above Answer: A Answer: A Answer: A 2) Which of these financial statements is compared to a snapshot in the text? A. Balance sheet B.