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
2) Dr. Gray, Chairman of the Executive Committee for a large physician group, decides
to create an ongoing benchmarking project. He chooses to measure his groups data
against available AMA national data and the first report is completed. Shortly thereafter
another physician becomes Chairman and kills the project. Conceptually speaking, can
the one and only first report be called a benchmarking process?
A. Yes
B. No
C. Not applicable
3) CMS has extended the deadline for ICD-10 compliance by one year. The compliance
date is now October 1st of:
A. 2013
B. 2014
C. 2015
D. none of the above
4) EHR Incentive Program payments are intended for:
A. Purchasing an electronic health records program
B. Replacing an electronic health records program
C. Achieving meaningful use while using certified electronic health records technology
D. A & C
E. B & C
F. All of the above
G. None of the above
5) Important assumptions related to revenue forecasts include:
A. Patient mix assumptions
B. Payer change assumptions
C. Assumptions about changes in utilization patterns
D. All of the above
E. None of the above
6) The purchase of a fixed asset is recorded as:
A. An operating expense
B. A capital expenditure
C. A short-term asset
D. Neither of the above
7) “Capital” represents the financial structure of the organization. It is generally
considered to be:
A. debt
B. a combination of debt and equity
C. a combination of equity and assets
D. none of the above
8) The Medicare program legislation is contained in:
A. Title XIX of the Social Security Act
B. Title XVIII of the Social Security Act
C. both of the above
9) Forecast assumptions can be determined by:
A. trend analysis
B. utilization changes
C. payer changes
D. all of the above
E. none of the above
10) Reliable forecasts of revenue are:
A. An important part of the organizations planning process
B. Also provide input into the organizations capital expenditure budget
C. Both of the above
D. Neither of the above
11) Which of the cash flow reporting methods does not take the time value of money
into account?
A. Payback method — does not
B. Accounting rate of return —- does not
C. Net present value yes, does
D. Internal rate of return yes, does
E. A & B
F. C & D
G. A, B & C
H. A, C & D
I. B, C & D
12) The manager needs to know the difference between fixed and variable costs in order
to:
A. Compute break-even points
B. Compute contribution margins
C. Understand a basic working tool in financial management
D. All of the above
E. None of the above
13) Examples of systems used to model or calculate that are impacted by the change
from ICD-9 to ICD-10 include how many of the following:
A. Presentation of clinical content for support of plans of care
B. Business rules guided by patient condition or procedure
C. Selection criteria within electronic medical records
D. A & B
E. A & C
F. B & C
G. All of the above
14) Unrestricted fund balance belongs on the:
A. Balance sheet
B. Statement of revenue and expenses
C. Neither of the above
15) A particular unit of an organization that is given responsibility for controlling costs
of the operations over which it holds authority is called a:
A. Cost center
B. Revenue center
C. Neither of the above
16) South Fork General Hospital has acquired certified EHR technology. How can
South Fork now meet the objectives of the EHR incentive program?
A. By measuring predetermined sets of criteria
B. By using performance measures
C. By applying for program incentive payments
D. A & B
E. A & C
F. B & C
G. All of the above
H. None of the above
17) Based on the information about ABC Healthcare contained in the previous question,
is ABC:
A. A for-profit company
B. A not-for-profit company
C. Not applicable
D. Dont know
18) Which of the following statements are correct?
A. Managers in cost center responsibility centers are responsible for controlling both
costs and revenues
B. Managers in profit center responsibility centers are responsible for controlling both
costs and revenues
C. Managers in profit center responsibility centers do not have to report to a supervisor
above them
D. None of the above
19) A hospital taxing district and a state university with an affiliated teaching hospital
can both be described as:
A. Government entities
B. Voluntary entities
C. Entities that pay no income tax
D. Entities that must pay income tax
E. A & C
F. B & C
G. A & D
H. B & D
20) Doctor Smith is contemplating the purchase of Dr. Johnsons practice. Frank, his
office manager, is about to prepare a worksheet combining the results of both practices
so Dr. Smith can review it. Frank has a twelve-month financial statement for Dr. Smiths
office and a nine-month financial statement from Dr. Johnsons office. Which of the
following approaches is correct?
A. The nine-month statement should first be annualized
B. Consistency over time periods is not necessary, so Frank can proceed
C. Neither of the above
21) Patient accounts receivable belongs on the:
A. Balance sheet
B. Statement of revenue and expenses
C. Neither of the above
22) Semivariable costs:
A. Have mixed elements of both semivariable and variable costs
B. Are sometimes called mixed costs
C. Both of the above
D. Neither of the above
23) Which variance is sometimes known as the activity variance?
A. Volume variance
B. Quantity variance
C. Price variance
D. None of the above
24) Within the annual management cycle, annual year-end reports will:
A. Allow the closing out of the information system so a new cycle can begin with the
new year
B. Report the end of a specific reporting period
Continue the information systems reporting cycle into a new year rather than closing it
out
C. A & B
D. A & C
E. B & C
F. None of the above
25) The text illustrates the information system components for an ambulatory care
setting that uses a clinical and financial data repository (both clinical and financial data
are fed into the same information system). Links to this system are explained as
follows:
A. The electronic data information (EDI) link to insurance company databases is a
system output -yes
B. The electronic data information (EDI) link to insurance company databases is a
system input -no
C. An automated medical record link provides additional input -yes
D. A & C
E. B & C
F. None of the above
26) When evaluating the use of resources in healthcare organizations, it is important to
use:
A. An objective process
B. A subjective process
C. Either of the above
D. Not applicable
27) Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling
$100,000. Of this amount, 60% is variable cost and 40% is fixed cost. What is the
clinics contribution margin, expressed in dollars?
A. $40,000
B. $60,000
C. $120,000
D. $140,000
E. None of the above
28) The Tri-State Medical Equipment Corporation purchases a large new delivery truck
and finances eighty percent of the purchase. Entering this transaction on the books of
the company should properly involve recording:
A. An asset on the balance sheet
B. A liability on the cash flow statement
C. Both an asset and a liability on the balance sheet
D. An entry to the reserve for depreciation on the income statement
E. None of the above
29) Dr. Simms, a stubborn orthopedic surgeon, tries to get his administrator to allocate
every cost on the groups income statement based on prior years results. The surgeon
believes tracing direct costs is a waste of time and he says besides, the figures all come
out the same anyway. Is the doctor correct?
A. Yes
B. No
C. Maybe
30) Quarterly reports:
A. Are often used by managers as milestones
B. May take the form of a quarterly budget review
C. Have been verified but have not yet been balanced
D. A & B
E. A & C
F. B & C
G. None of the above
31) Joseph, an RN in the emergency room of Sample Hospital, begins his Saturday
night shift by punching his time card into the machine by the employee entrance. From
what you understand about the four segments that make a healthcare system work,
where does Josephs time card belong? In the:
A. Original records segment
B. Information system segment
C. Accounting system segment
D. Reporting system segment
E. None of the above
32) Raw data will typically appear in the organizations:
A. Quarterly report
B. Annual year-end report
C. Quarterly statistics
D. A & B
E. A & C
F. B & C
G. None of the above
33) John, the controller at one of the Metropolis Health System hospitals, has used the
unadjusted rate of return method when preparing a report submitted to the Executive
Committee. The Committee Chairman, who has a reputation as a know-it-all, questions
the use of the unadjusted rate of return method. At this point the Vice President of
Finance jumps in and says he approves of using this method: first because the
information necessary for the computation is obtained from existing financial
statements, second because it is one of the recognized methods of evaluating the use of
the hospitals money, and third because it is easy to understand. Is the Vice President
correct in all three points?
A. Yes
B. No
C. Dont know
34) Properly constructed financial projections should provide information that is:
A. Laid out in a logical format
B. Properly explained for a knowledgeable reader
C. Supported by key assumptions that are documented
D. Supported by a series of assumptions, documented or otherwise
E. A & B
F. A, B & C
G. A, B & D
35) Within a departmental operating budget, which of the following will probably be
allocated?
A. Patient-related expense
B. Supporting patient care
C. Administrative expense
D. A & B
E. A & C
F. All of the above
36) Within the Cost Classification chapter an example (Westside) has been provided of
responsibility center interactions between and among certain managers, their
responsibilities, the lines of supervision, and their various reports. Did each manager
receive a report that included the figures that they themselves are responsible for?
A. Yes
B. No
C. Not applicable
37) The HITECH initiative actually contains how many programs?
A. One (Medicare only)
B. Two (Medicare and Medicaid)
C. Three (Medicare, Medicaid and a state-specific program)
C. None of the above
38) A SWOT analysis, properly performed, can be an excellent strategic tool. The four
components of a SWOT analysis include (1) strengths; (2) __________; (3)
opportunities; and (4) __________.
39) Three important staffing forecast considerations include 1) controllable versus
noncontrollable expense; 2) labor market issues; and 3) required __________.
40) “Certified EHR Technology means an electronic health record that has been
especially certified for ___________________________________.
41) The statement of cash flows typically takes the __________ basis statements and
converts them to a cash flow for the period through a series of reconciling adjustments
that account for the noncash amounts.
42) Assume the following: Beginning inventory= $4,000; Ending inventory= $6,000;
Purchases= $22,000; Cost of Goods Sold= $20,000.
Calculate the inventory turnover. Correct answer is:
A 2.0
B 3,333
C 5.0
D 4.0
E None of the above
43) Inpatient versus outpatient grouping of expenses:
A: recognizes different sites at which services are delivered
B. is a basic type of care setting grouping
C. both of the above
44) Ratio analysis should be conducted as a __________ analysis.
45) Inventory appears on the balance sheet as a __________ asset, since the items that
make up the inventory are expected to be sold within a twelve-month period.
46) The HITECH Act allows a range of transition dates for inpatient hospital service
paid incentives. As of the date of this writing, the hospital transition dates range from
October 1, 2011 to 2015. Also as of the date of this writing, the last year that physicians
can adopt electronic health records under ARRA without financial penalty is
__________.