1) When grouping accounts for planning or control, it is permissible to classify
revenues by either service line or disease management category.
2) One output from the clinical and financial data repository is insurance verification
for patients through an electronic data information link to insurance company
databases.
3) Types of capital expenditure proposals commonly include proposals to acquire new
equipment, proposals to fund the expansion of existing programs, and/or proposals to
acquire capital assets for future use.
4) The gross domestic product (GDP) is considered to be the “gold standard” measure
of the country’s overall economic fitness.
5) The internal rate of return (IRR) uses a discounted cash flow technique.
6) The overall level of sophistication for a particular business plan should depend upon
those decision makers who will be its secondary audience.
7) The First-In-First-Out (FIFO) inventory method recognizes the last costs placed into
inventory as the first costs moved out into cost of goods sold when a sale occurs.
8) When communicating financial information effectively to others, it is important to
place extensive detail within the body of the report.
9) Cash equivalents are termed liquid assets because they can be liquidated and turned
into cash on short notice when needed.
10) The most frequent pattern of semi variable costs is the step pattern.
11) The prorated real estate taxes typically represent an expense to be reported in the
current year.
12) Regarding physician incentives under the HITECH Act, at the time of this writing if
the first payment year (year 1) is after 2014, no incentive dollars will be paid, and if
adoption has not occurred by 2015, the physician’s fee schedule payment amount will
be reduced by a percentage.
13) Comparability requires consistency.
14) The HITECH EHR Incentive programs provide incentive payments to eligible
professionals and eligible hospitals as they adopt, implement, upgrade or demonstrate
meaningful use of certified EHR technology. However, these incentive programs do not
specifically include eligible critical access hospitals (CAHs).
15) Projections are based on assumptions that are expected to exist. They reflect actions
that are expected to occur.
16) “Indexed to inflation” means monies will fall in accordance with an inflationary
increase.
17) A flexible budget:
A. is adjusted, or flexed, to the level of output expected to be achieved during the
budget period
B. is based on a level of operations that will show change during the budget period
C. looks toward a range of activity or volume
D. all of the above
E. A and B only
F. A and C only
18) Common uses of comparisons include (mark all that apply):
A. compare current expenses to current budget
B. compare current actual expenses to prior periods in own organization
C. compare to other organizations
D. compare to industry standards
E. all of the above
F. A and B only
G. A, B and C only
19) How many of the following should be considered when forecasting equipment
acquisition?
A. Required square footage
B. Availability of square footage
C. Location
D. Compatibility
E. .A, B & C
F. A, B & D
G. All of the above
H. None of the above
20) In addition to the composition of the overall management team, the business plan’s
Organization segment should include the:
A. division responsible for operations
B. directly responsible supervisor
C. department responsible for the budget
D. competition and its impact
E. all of the above
F. A, B and C only
G. A and B only
21) Jack, the general manager of a physician practice, decides to use estimates for
several items when preparing the monthly financial statements for the doctors. His
decision is considered to be:
A. A correct use of estimates
B. A common use of estimates
C. An incorrect use of estimates
D. A & B
E. None of the above
22) If a lease contract meets any of four particular criteria, then that lease must be
capitalized. If, however, a lease contract does not meet any of the four criteria, then that
lease is considered to be:
A. An operating lease
B. A financial lease
C. Not a lease at all
D. None of the above
23) How many of the following questions are appropriate to ask when commencing a
situational analysis project?
A. What type of task force or committee does the project need?
B. Who will be appointed to this task force?
C. What types of data/information should be gathered for this project?
D. Who will gather the information that is needed?
E. All of the above
F. A, B & C
G. B, C & D
H. All of the above
24) Currency exchange rates may be expressed in one of two ways: either in U.S.
dollars or per U.S. dollars.
A. Correct
B. Not correct
C. Not applicable
25) Financial reporting primarily deals with:
A. Future transactions such as projecting outcomes and preparing budgets
B. Transactions that have already occurred
C. Both transactions that have already occurred and certain future transactions
D. A & B
E. A & C
F. B & C
G. None of the above
26) The Cost-Volume-Profit (CVP) Ratio is often called the break-even point.
A. Correct
B. Not correct
C. Not applicable
27) When purchasing equipment, the asset representing the equipment purchase is
recorded on the organization’s:
A. statement of income
B. balance sheet
C. neither of the above
28) The EHR Incentive Medicare program computes a certain portion of payments to
eligible hospitals based on a formula. This formula commences by dividing eligible
hospitals into how many classes?
A. One class only
B. Two classes
C. Three classes
D. Four classes
E. None of the above
29) When a companys bonds are sold, the purchaser expects to receive a certain amount
of interest that is usually paid annually.
A. Correct
B. Not correct
C. Not applicable
30) Bonds are typically:
A. Long-term contracts
B. Short-term contracts
C. Both of the above
D. Neither of the above
31) Information about any applicable required training should be included in the:
A. Financial segment
B. Marketing segment
C. Service or equipment description
D. Any of the above
E. None of the above
32) Medical supplies and drugs-Inventory belongs on the:
A. Balance sheet
B. Statement of revenue and expenses
C. Neither of the above
33) A lease-purchase agreement is actually a contract to purchase.
A. Correct
B. Not correct
C. Not applicable
34) When considering a real estate mortgage, which of the following questions are not
relevant or are not appropriate?
A. What is the ROI (return on investment)?
B. What is the interest rate (cost of money)?
C. Either of the above
D. Neither of the above
35) If the business plan’s Financial Analysis segment contains a projected income
statement, one line item may be ‘space occupancy”. If so, ‘space occupancy” may
include:
A. annual depreciation expense or rent expense
B. utilities
C. insurance
D. all of the above
E. A and B only
36) Revenue is considered to be outflow, and expenses are considered to be inflow.
A. Correct
B. Not correct
C. Not applicable
37) Not all amortization schedules are set up in the same way. Of the column headings
listed below, what heading would not appear on an amortization schedule?
A. Interest expense
B. Principal portion of payment
C. Closing cost portion
D. Remaining prinicipal balance
E. Cumulative principal
F. Cumulative interest
G. None of the above
38) Eligible healthcare organizations that may be able to issue bonds through a local
healthcare financing authority include:
A. For-profit (proprietary) organizations
B. Not-for-profit organizations
C. Both of the above
D. Neither of the above
39) Money market funds are:
A. Currency
B. Cash equivalents
C. Either of the above
D. Neither of the above
40) In many hospitals, orientation training expense (aka educational resources) is a
shared expense that will be allocated to multiple departments. In these cases it is:
A. An indirect cost
B. A direct cost
C. Either of the above
D. Neither of the above
41) Decisions about how to obtain capital:
A. May impact long-term cash flow
B. Are an important part of financial management
C. Are an important part of financial decision making
D. May have to work through a formal approval process
E. All of the above
F. None of the above
42) The operating margin:
A. Sometimes enters into credit analysis
B. Is a multipurpose measure
C. Is used for a number of managerial purposes
D. All of the above
E. None of the above
43) The financial analysis for a business plan should consist of a forecast of operations.
This forecast may contain:
A. A cash flow statement only
B. A balance sheet, income statement and cash flow statement
C. An income statement and cash flow statement
D. A & B
E. A & C
F. Any of the above
44) Selling bonds is a common example of:
A. Borrowing from investors
B. Borrowing from the government
C. Borrowing from a lending institution
D. Buying back stock of the company
E. None of the above
45) Assume loan cost points must be spread, or recognized, over several years. In that
case, which of the following statements is not correct?
A. The number of years over which the points will be recognized is determined
B. Each year a certain portion of the points cost will be charged to current operations
C. The total cost of the loan cost points would first be placed on the balance sheet
D. The annual charge would be recorded as an amortized expense
E. All of the above are correct
F. None of the above are correct
46) The books and records of the financial information system for the organization
serve to __________.
47) If an asset cannot be converted into cash within a twelve-month period, it is
considered to be a __________ asset.
48) In regard to working with operating budgets, there are two common types of
responsibility centers: __________ centers and __________ centers.
49) Preferred stock has preference over __________ stock in certain issues such as
payment of dividends.
50) Nonproductive time means additional days __________ but not worked.
51) The contribution margin is the difference between revenue and __________ costs.
52) The economic resources that have expected future benefit to the business are called
__________.