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. Move the laundry operation to another larger building on campus that will need to be
renovated
D. Move out of the building and hire a commercial laundry service instead
E. All of the above
2) Multiple levels of forecasted revenue can be illustrated on a chart or graph, with:
A. Revenue in dollars on the vertical axis and time periods on the horizontal axis
B. Time periods on the vertical axis and revenue in dollars on the horizontal axis
C. Revenue in dollars on the vertical axis and time expressed as percentages on the
horizontal axis
3) According to CMS, benefits of transitioning to ICD-10 include the following:
A. Improved disease management
B. Improved health conditions and outcomes
C. Compatibility of worldwide disease monitoring and reporting
D. A & B
E. A & C
F. B & C
G. All of the above
4) The process of recording equipment acquired through a contract-to-purchase is
called:
A. Acquiring the lease
B. Depreciating the lease
C. Capitalizing the lease
D. None of the above
5) The concept of present-value analysis is based on the fact that:
A. the value of a dollar in the future is worth more than the value of a dollar today
B. the value of a dollar today is more than the value of a dollar in the future
C. neither of the above
6) The Green Tree Nursing Facility possesses another note receivable in the amount of
$9,000. This note will be paid in three installments: $3,000 in six months, $3,000 in
eighteen months, and the remaining $3,000 in twenty-four months. The accountant will
record this note receivable as follows:
A. Current, or short-term asset of $9,000
B. Long term asset of $9,000
C. Current asset of $3,000 and long term asset of $6,000
D. Current asset of $6,000 and long term asset of $3,000
E. None of the above
7) The FDIC generally provides separate coverage for:
A. Keoghs
B. IRAs
C. Both of the above
D. Neither of the above
8) In most healthcare organizations, an expense is paid:
A. At a later time, after the expense is incurred
B. At the point where the expense is incurred
C. Neither of the above
9) The Liabilities to Fund Balance ratio is:
A. a quick indicator of debt load
B. also known as the Debt to Net Worth ratio
C. both A and B
D. neither A nor B
10) Metropolis Health System enters into a lease contract for a new pharmacy robotic
drug cart equipment system. The Metropolis CFO determines that the useful life of the
drug cart system is ten years. The lease contract will run for eight years. Does this lease
have to be capitalized?
A. Yes
B. No
C. Dont know
11) The term fund balance may be properly used by a:
A. Not-for-profit organization
B. U.S. governmental entity
C. For-profit corporation
D. For-profit sole proprietor
E. A & B
F. C & D
G. None of the above
12) In regard to system implementation planning recommendations, the phase called
Planning for Strategic Control should include the following:
A. Plan measurement tools
B. Plan actions to implement
C. Plan evaluation strategies
D. A & B
E. A & C
F. B & C
G. All of the above
13) Which of the following legislative acts contain compliance requirements for current
strategic planning by federal governmental agencies?
A. The Government Performance and Results Act (GPRA) of 1993
B. The Government Performance and Results Modernization Act of 2010
C. The Health Information Technology for Economic and Clinical Health Act of 2009
D. A & B
E. A & C
F. B & C
G. All of the above
14) The Price Index for Gross Domestic Purchases issued by the Bureau of Economic
Analysis (BEA) measures:
A. Prices paid by U.S. residents
B. Prices paid by world-wide residents
C. Prices paid by North American residents
D. Any of the above
E. None of the above
15) CMS acknowledges which of the following in regard to transition costs from
ICD-9-CM to ICD-10 code sets:
A. Large providers and institutions will most likely need to make system changes and
software upgrades
B. Small providers will most likely also need to make system changes as well as
software upgrades
C. Some transition costs are unavoidable
D. A & B
E. A & C
F. B & C
G. All of the above
16) The real key to understanding finance is understanding:
A. the chief executive officers mission statement
B. the elements of finance and their relationship to each other
C. the organizations financial analysis software
17) The philosophy of the organization is explained by the:
A. Mission statement
B. Vision statement
C. Organizational values statement
18) Common sizing is sometimes called:
A. horizontal analysis
B. vertical analysis
C. neither of the above
19) When a patient information flowsheet illustrates the flow resulting from deficient
data, which of these causes and consequences may apply?
A. One cause may be a bad address on the billing statement
B. One consequence is that the payer rejects the bill
C. Another consequence is that the provider does not receive payment
D. A good financial manager may recognize the significance of this flow and correct the
cause
E. A, B & C
F. All of the above
20) If you need to apply an inflation factor to a whole series of years, you must account
for:
A. The cumulative effect over time
B. The cumulative effect of expenses
C. Trend analysis
D. None of the above
21) Using your computation of LIFO ending inventory from the previous question,
what is the cost of goods sold amount?
A. $150
B. $200
C. $250
D. None of the above
22) Depreciation expense is a necessary assumption when calculating comparative cash
flow for:
A. A not-for-profit company
B. A for-profit company
C. Both of the above
D. Not applicable
23) How many of the following questions are appropriate to ask before completing a
SWOT analysis?
A. Who prepares the final report?
B. Who receives the final report?
C. Who is responsible for taking appropriate action after the analysis and its report are
completed?
D. A & B
E. A & C
F. B & C
G. All of the above
24) How many of the following are Balance Sheet assumptions?
A. Cash inflow
B. Cash on hand
C. Long-term liabilities
D. A & B
E. A & C
F. B & C
G. All of the above
H. None of the above
25) Private sector organizations means organizations that are part of the health care
industry and may be:
A. Part of a government entity
B. A proprietary organization
C. A non-profit organization
D. A & B
E. A & C
F. B & C
G. All of the above
H. None of the above
26) Cash reserves on the Tri-State Medical Equipment Corporations balance sheet
presently amount to $111,200. When Tri-State pays cash for twenty percent of the
purchase price of the new delivery truck, the cash payment will:
A. Increase the companys cash reserves
B. Decrease cash on the balance sheet
C. Require an entry on the Statement of Retained Earnings
D. Require an entry to the Reserve for Depreciation on the Income Statement
27) The Hilltop Home Health Agency is part of the not-for-profit Mountainview
Retirement Community complex. Hilltop is reviewing and updating its old mission
statement. Should we expect the overall content of this organizations mission statement
to be:
A. Broadly charitable in nature
B. Generally proprietary in nature
C. Lengthy
D. Containing advertising phrases about the retirement community
E. A, & C
F. B & D
G. B, C & D
28) If net revenues are $500,000, variable cost is $350,000 and fixed cost is $120,000,
what is the contribution margin (in dollars)?
A. $350,000
B. $30,000
C. $150,000
D. None of the above
29) According to the National Center for Health Statistics, the International
Classification of Diseases, 10th Revision (ICD-10) is designed to promote international
comparability in the:
A. Processing of certain statistics
B. Classification of certain statistics
C. Presentation of certain statistics
D. A & B
E. A & C
F. B & C
G. All of the above
H. None of the above
30) When preparing to use a look-up table as described in the text:
A. Find the line for the proper interest
B. Find the column for the proper number of years
C. Both of the above
D. Neither of the above
31) Charity service is:
A. Generally defined as services provided to financially indigent patients
B. Represents a major type of deduction from revenue classification
C. Both of the above
D. Neither of the above
32) The capital expenditures budget usually consists of:
A. spending for capital assets already acquired and in place
B. spending for new capital assets
C. both of the above
D. neither of the above
33) A profit center operating budget may be expected to show:
A. Operating costs only
B. Operating costs and revenues
C. Operating costs and capital expenditures
D. None of the above
34) Forecast assumptions may also be determined by:
A. patient mix changes
B. contractual allowances
C. both of the above
D. neither of the above
35) The burden approach allows the full cost of a position to be computed. When
computing full-time equivalents, the burden approach is used in the:
A. Annualizing approach (to annualize staff positions)
B. Scheduled position approach (to fill staff positions)
C. Real-time computerized approach (to recognize staff positions)
D. None of the above
36) When real estate taxes are allocated, they are considered to be:
A. Direct costs
B. Indirect costs
C. Either of the above
D. Neither of the above
37) Sample Hospitals Benchmark Data Report also includes the Days Receivable ratio
(listed on the report as Net Days in Patient AR). The days receivable for Year 1
amounted to 50.73 days, while the days receivable for the first quarter of Year 2
amounted to 49.0 days. Is the result for the first quarter of Year 2 better or worse than
the result reported for Year 1?
A. Better
B. Worse
C. The same (neutral)
D. Dont know
38) Within the business plan, a discussion of who may use the service belongs in the:
A. Organization segment
B. Marketing segment
C. Financial segment
D. All of the above
E. None of the above
39) In its broadest sense, variance analysis analyzes the difference between:
A. Actual and budgeted prices and quantities
B. Actual and standard prices and quantities
C. Budgeted and standard prices and quantities
D. All of the above
E. None of the above
40) Smaller public companies may not be listed on a stock exchange. The stock of these
companies is considered to be unlisted; instead, their stock is traded __________.
41) A sole proprietorship’s or a partnership’s net worth may be labeled as __________.
42) The operating budget is the instrument through which __________ are quantified in
financial terms.
43) Of all areas of the business plan, the __________ segment is most likely to be
overoptimistic in its assumptions.
44) Dr. Robert Smith’s practice is preparing to open a second office location. The bank
loan for new equipment and furnishings amounts to $20,000 at 12% per year. Dr. Smith
will make monthly payments. How much interest expense will be due for the first
month’s payment on the loan? $__________.
45) The internal rate of return (IRR) method is a more precise method because it
recognizes the time pattern in which the earnings occur. Thus it calculates from
__________ to __________.