Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
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".
2) The product cost concept is important to managers of departments such as pharmacy
that hold a significant amount of inventory.
3) Another good example of variable cost is the food for group home residents.
4) Private pay revenue is more prevalent in hospitals than in nursing facilities or
assisted living facilities.
5) The standard, traditional and consistent arrangement of expenses on Medicare and
Medicaid cost reports has strongly influenced the arrangement of expense formats in
many healthcare information systems.
6) The healthcare industrys essential business is the delivery of healthcare services.
7) The use or quantity variance is a type of flexible budget variance. It is also known as
the efficiency variance.
8) A business plan is a document typically prepared in order to obtain funding and/or
financing.
9) Government organization types may include the following: federal; city-county;
churches; and/or state universities
10) Identifying stakeholders and commencing to assess impacts of the ICD-10 adoption
are considered part building the situational analysis SWOT matrix.
11) Depreciation expense is a non-cash expense item on the statement of income.
12) In most cases common sizing involves converting percentages back to dollar
amounts.
13) Which governmental entity is charged with establishing programs to improve
healthcare quality, safety and efficiency through the use of the health IT infrastructure?
A. The Office of the National Coordinator for Health Information Technology
B. The Health and Human Services Department (HHS)
C. The National Center for Health Statistics (NCHS)
14) Costs that vary in direct proportion to changes in the volume of operations are:
A. Variable costs
B. Semivariable costs
C. Fixed costs
D. None of the above
15) The format of a contribution income statement is described as follows:
A. Revenue less fixed costs equals contribution margin less variable and fixed costs
equals operating income
B. Revenue less variable costs less fixed costs equals operating income
C. Revenue less variable costs equals contribution margin less fixed costs equals
operating income
D. None of the above
16) All transactions for the period reside in the:
A. General ledger
B. Cash receipts and cash disbursements journals
C. Accounts receivable and accounts payable journals
D. A & B
E. A & C
F. B & C
G. None of the above
17) In the U.S., financial statements intended for external purposes must follow GAAP,
or generally accepted accounting principles. The treatment of equipment leases in
financial statement used for external purposes:
A. Falls under GAAP
B. Is not affected by GAAP
C. Neither of the above
18) The concept of the flexible budget addresses:
A. Control
B. Planning
C. Workloads
D. All of the above
19) Costs that cannot be traced are considered to be:
A. Direct costs
B. Indirect costs
C. Supplementary costs
D. Primary costs
E. None of the above
20) In regard to the DSCR formula, change in unrestricted net assets is also typically
known as:
A. Net debt service
B. Total income
C. Net assets
D. None of the above
21) Federal and state governments release a great deal of public information and
statistics regarding the provision of health care. This information:
A. Cannot be used as standards because the information was provided by the
government
B. Often contains industry standards that can be used by healthcare organizations
C. Neither of the above
D. Dont know
22) Duke University Health System (Duke) is an example of how private sector
healthcare organizations have contributed to change in healthcare information
management. In this regard, how many of the following statements about the Duke
University Health System are correct?
A. Duke has begun a multi-year information systems project to unify electronic medical
records across the health system
B. Prior to implementing this unified EHR project, Duke had more than 135 different
clinical technology applications in use
C. The projects estimated gross investment figure is reported to be $500 million, but the
net new investment is a little over $300
D. A & B
E. A & C
F. B & C
G. All of the above
H. None of the above
23) In variance analysis, the actual quantities of materials, labor and certain types of
overhead used represent:
A. Outputs
B. Inputs
C. Differential analysis
D. None of the above
24) Midtown Clinics internet and telephone service expense for a ten-month period
amounts to $2,000. To annualize this expense for a twelve-month period, the first step
would be:
A. Multiply the $2,000 by twelve
B. Multiply the $2,000 by ten
C. Divide the $2,000 by twelve
D. Divide the $2,000 by ten
E. None of the above
25) The Midtown General Hospitals financial committee discussion about the old
laundry building is in progress. The CFO points out that (1) keeping the existing
laundry building in its present condition will require ongoing repair and maintenance
expenses; (2) renovating the larger building will cost more than renovating the existing
smaller old building; and (3) hiring a commercial laundry service will involve
contracting for services. Which of these choices will involve expending capital funds?
A. Keep the existing laundry building in its present condition through ongoing repairs
and maintenance
B. Renovate either one of the buildings and replace the equipment
C. Contract for commercial laundry services
D. A & B
E. A & C
F. B & C
G. All of the above
26) When computing the cost of owning: to commence calculating a comparative cash
flow, first determine the equipment purchase price.
A. Correct
B. Not correct
C. Not applicable
27) The 150% Declining Balance (150% DB) method is:
A. An accelerated depreciation method
B. A straight-line depreciation method
C. Computes depreciation using a fraction
D. Computes depreciation using a constant percentage or factor
E. A & C
F. A & D
G. B & C
H. B & D
28) The Horizon Hospice provides a gift basket to every new patient that is admitted to
the hospice. The baskets cost $15.00 apiece. These gift basket costs represent a:
A. Variable cost
B. Semivariable cost
C. Fixed cost
D. None of the above
29) In many hospitals, drugs that are requisitioned by the Intensive Care Unit (ICU) are
traced, and thus recorded, as part of ICU costs. In this circumstance the cost is:
A. An indirect cost
B. A direct cost
C. Either of the above
D. Neither of the above
30) Peer group financial benchmarking in healthcare typically compares:
A. Financial measures among divisions within an organization
B. Financial measures among benchmarking groups
C. Nonfinancial measures among benchmarking groups
D. None of the above
31) Procedure codes, known as Current Procedural Terminology (CPT) codes, are most
commonly used to group cost centers for:
A. inpatient services
B. outpatient services
C. both of the above
32) Municipal bonds may be issued by a:
A. County
B. State
C. Political subdivision
D. All of the above
33) Using the same assumptions as the preceding question, what would the remaining
principal balance be after the payment described above?
A. $48,000
B. $47,200
C. $46,800
D. $49,200
E. None of the above
34) Using a factor when computing the number of employees required to fill a
scheduled position is desirable when:
A. The position needs to be filled for 24 hours
B. The position needs to be filled for seven days a week
C. Both of the above
D. Neither of the above
35) Certain grant monies received by healthcare organizations may be transactions
outside the operating budget because:
A. they are restricted funds
B. they may require separate accounting and reporting
C. the American Hospital Association objectives for budgeting (listed in Chapter 15)
says they should not be commingled funds
D. all of the above
E. A and B only
F. A and C only
36) One traditional source of capital involves retaining the excess of revenues over
expenses. The Acme Pharmaceutical Company, a for-profit corporation, is a relatively
small start-up company. As a start-up, Acme has recorded operating losses for each of
its five years of existence. The company now needs to raise more capital for research
and development. Will retaining the excess of revenues over expenses be a possible
source of capital for Acme?
A. Yes
B. No
C. Not applicable
37) Contractual allowances:
A. Are often for composite services
B. Are never for composite services
C. Not applicable
38) Tying cost to staffing means obtaining accurate cost data from an appropriate
record. For example, a subsidiary journal may provide the following information:
A. Computation of gross earnings
B. Regular and overtime hours
C. Hourly rate and base pay
D. All of the above
E. None of the above
39) Depending upon the structure of the organization, a cost center might be:
A. An office
B. A division
C. A department
D. All of the above
E. None of the above
40) Of the four segments that make a healthcare financial system work, which segment
records evidence that an event has occurred?
A. The accounting system
B The reporting system
C. The original records
D. The information system
E. Any of the above
41) Subsidiary reports:
A. Support the major reports by providing more detail
B. Are typically called statements instead of schedules
C. Both of above
D. Neither of the above
42) The budget process should include:
A. Review of strategy
B. Review of objectives
C. Forecast of workload
D. Identifying special use of resources
E. A & B
F. B & C
G. A, B & C
H. All of the above
43) The Liabilities to Fund Balance computation may be represented as:
A. Total debt divided by tangible net worth
B. Total liabilities divided by unrestricted net assets
C. Either of the above
D. Neither of the above
44) The Centers for Medicare and Medicaid Services (CMS) was originally called the:
A. Health and Human Services Department (HHS)
B. Health Care Financing Administration (HCFA)
C. Office of the Inspector General (OIG)
D. None of the above
45) How many of the following statements about financial forecasts are correct?
Forecasts:
A. Are based on assumptions that are expected to exist
B. Reflect actions that are expected to occur
C. Are based on different sets of hypothetical assumptions
D. Reflect actions that might occur, based on such hypothetical assumptions
E. Are considered to be prospective financial statements
F. A & B
G. A, B & E
H. C & D
I. C, D & E
46) Indirect costs are for:
A. the sole benefit of a particular operating unit
B. the benefit of the overall operation
C. neither of the above
47) A Health Information Exchange (HIE) is properly defined as:
A. The electronic movement of health-related information among organizations
according to nationally recognized standards
B. The electronic movement of health-related information among organizations
according to Version 5010 standards
C. The electronic transfer of information in a standard format between trading partners
D. Any of the above
E. None of the above
48) An organizations economic resources may also include:
A. Inventory on hand
B. Cash on hand
C. Buildings
D. A & B
E. A & C
F. B & C
G. All of the above
49) The unadjusted rate of return computation described in the text uses a look-up table.
A. Correct
B. Not correct
C. Not applicable
50) Of the four segments that make a healthcare financial system work, which segment
gathers evidence that an event has occurred?
A. The original records
B. The information system
C. The accounting system
D. The reporting system
E. Any of the above
51) Ratio analysis should:
A. Be interpreted within the context of the operation
B. Have the differences between periods considered
C. Typically be conducted as a comparative analysis
D. Rarely be conducted as a comparative analysis
E. A & B
F. A, B & C
G. A, B & D
H. None of the above
52) Different FIFO inventory assumptions:
Beginning inventory of 10 units @$5 = $50
Purchases month #1 of 10 units @$15= $150
Purchases month #2 of 10 units @$10 = $100
Cost of goods available for sale (subtotal) = $300
Less ending inventory of 10 units
Equals cost of goods sold (also known as cost of sales)
Under the FIFO inventory method, what is the cost of goods sold or cost of sales?
A $150
B $250
C $200
D None of the above
53) Different LIFO inventory assumptions:
Beginning inventory of 10 units @$15 = $150
Purchases month #1 of 10 units @$15 = $150
Purchases month #2 of 10 units @$10 = $100
Cost of goods available for sale (subtotal) = $400
Less ending inventory of 10 units
Equals cost of goods sold (also known as cost of sales)
Under the LIFO inventory method, what is the cost of goods sold amount?
A $300
B $250
C $200
D None of the above
54) Borrowing from a lending institution is a typical source of capital and is generally
classified by the length of the loan. Thus short-term borrowing is commonly expected
to be repaid within a __________-month period.
55) Within the sequential steps to compute estimated ending drug inventory, the
beginning drug inventory plus the net drug purchases equals __________.
56) One of the most common examples of a semi-variable expense in healthcare is
__________.
57) In regard to evaluating capital expenditure budget proposals, "to be capitalized"
means the expenditure would be placed on the balance sheet as an additional capital
cost that is recognized as an __________.
