1) Menu objectives are mandatory while core objectives provide a choice for the
provider.
2) The unadjusted rate of return method results in a precise answer.
3) The net book value of a fixed asset represents the remaining depreciated portion of
the fixed asset cost.
4) Lost productivity costs result from a slow-down in coding bills and claims because
of the need to learn about information on the relevant CMS website page.
5) Managers within health care organizations must have one of two views: either
financial or process.
6) Within the strategic planning cycle, stakeholders can be both internal and external.
7) In the comparative analysis of operating data, vertical analysis usually involves
converting dollars to percentages, and the comparison is across time.
8) Managerial accounting is primarily for third party or outside use.
9) Unadjusted rate of return is sometimes called the accountant’s method because
information required is all obtained from the financial statements.
10) Most organizations have a 12-month reporting period known as a fiscal year.
Anything less than a full 12-month year is called a ‘stub period” and is fully spelled out
in the heading of the report.
11) Which of the financial statements is compared to a diary in the text?
A. Balance sheet
B. Statement of revenue and expense
C. Statement of fund balance/net worth
12) Being knowledgeable about the meaning that lies behind investment terms allows
you a wider view of finance transactions.
A. Correct
B. Not correct
C. Not applicable
13) Other examples of vendor software and systems that will need revising due to the
change from ICD-9 to ICD-10 include how many of the following:
A. Billing systems
B. Medical records abstraction
C. Reporting programs and external interfaces
D. A & B
E. A & C
F. B & C
G. All of the above
14) The factor that is found in the present value table can also be obtained through the
use of:
A. A computer spreadsheet
B. A business analyst calculator
C. Either of the above
D. Neither of the above
15) Comparative analysis is important to managers because it creates a common ground
to make judgments for:
A. Planning
B. Control
C. Decision-making
D. All of the above
E. None of the above
16) When the budgeted amount is a financial variable reported by the accounting
system, a variance:
A. Is the difference between an actual result and a budgeted amount
B. May or may not be a standard amount
C. May or may not be a benchmark amount
D. A & B
E. A & C
F. All of the above
G. None of the above
17) Capitalizing an equipment lease means the equipment must be recorded on the
books of the organization as:
A. a purchase
B. an expense of current operations
C. neither of the above
18) Within cost reports, the cost center is:
A. The same as a responsibility centers cost center that is used for planning and control
B. A focus of the overall cost report methodology
C. A type of cost pool used in the cost-finding process
D. A & B
E. A & C
F. B & C
G. None of the above
19) Most, though not all, healthcare revenues are received in the form of:
A. Cash
B. Credit
C. Notes receivable
D. Exchange of services
E. None of the above
20) Hillwood Clinic borrows $90,000 from the bank with the following terms: $20,000
of the this amount to be paid in Year 1, $30,000 to be paid in Year 2, and $40,000 to be
paid in Year 3 . At the beginning of Year 1 the loan is classified as follows:
A. $20,000 short-term note payable plus $70,000 long-term note payable
B. $50,000 short-term note payable plus $40,000 long-term note payable
C. $90,000 long-term note payable
D. None of the above
21) The target operating income computation using the contribution margin method
determines how many units must be sold in order to yield a particular:
A. Gross revenue
B. Operating income
C. Net revenue
D. None of the above
22) Which of the following is correct? The statement of changes in fund balance/net
worth is:
A. Stated over a period of time
B. Freezes figures and reports them as of a certain date
C. Neither of the above
23) Typical classifications used to group revenue include:
A. revenue source
B. revenue centers
C. care settings
D. service lines
E. all of the above
24) Within the Cost Classification chapters Westside example of responsibility center
interactions and related reports, did the final summary report subtract negative figures
from positive figures to arrive at a net result?
A. Yes
B. No
C. Not applicable
25) With a perpetual inventory system, the healthcare organization physically counts the
inventory on hand and attaches costs per item to these counts in order to arrive at the
ending inventory cost.
A. Correct
B. Not correct
C. Not applicable
26) In the near future there is a possibility that certain companies may be required to
adopt international accounting standards, including standards regarding the treatment of
leases. If so, the entities affected would include:
A. All companies that issue financial statements used for external purposes
B. U.S. publicly-held companies
C. Both of the above
D. Neither of the above
27) Benefits of the Medicare and Medicaid EHR Incentive Program may include how
many of the following:
A. Decreases in length of stay
B. Reductions in repeat tests
C. Increased patient safety
D. A & B
E. A & C
F. B & C
G. All of the above
28) Deciding how to use the resources of the organization:
A. Is the element of financial management called organizing
B. Is the element of financial management called directing
C. Will result in the most effective way to carry out established plans
D. A & B
E. A & C
F. B & C
G. All of the above
29) Which governmental entity is instructed to work toward the goal of developing a
nationwide health information technology infrastructure that allows for the electronic
use and exchange of information?
A. The Office of the National Coordinator for Health Information Technology
B. The Health and Human Services Department (HHS)
C. The Office of the Inspector General (OIG)
30) Using your computation of LIFO cost of goods sold from the previous question, and
further assuming Sales equal $500 and Operating Expenses equal $50, what is the
Gross Profit amount?
A. $200
B. $300
C. $250
D. None of the above
31) Management must make decisions about major ICD-10 transition costs incurred by
their own organization. Which of the following will generally be True?
A. If proper standards are adopted (Version 5010 is an example), there should not be
any other transition costs to the organization
B. Some costs to the organization will be one-time costs
C. Other costs to the organization will become recurring costs
D. B & C
E. None of the above
32) The Jones and Brown medical practice bought new equipment for a total price of
$50,000. The old equipment that was being replaced was traded in on the new
equipment. The seller allowed $10,000 for the equipment that was traded in. What is the
resulting Jones and Brown cumulative cash flow?
A. $50,000
B. $40,000
C. $10,000
D. None of the above
33) Stock exchanges exist to trade the stock of:
A. Publicly held companies
B. Both privately and publicly held companies
C. Either of the above
D. Neither of the above
34) Return on total assets may be computed as:
A. earnings before interest and taxes (EBIT) divided by total assets
B. earnings after interest and taxes (EBIT) divided by total assets
C. earnings before interest and taxes (EBIT) divided by total net worth
35) Metropolis Health System has an opening for an RN in its West campus. The West
campus nursing staff is scheduled in eight-hour shifts seven days per week. Lydia and
Jane suggest that they share this position. Lydia proposes to work eight hours a day for
three days (Monday, Wednesday and Friday), while Jane proposes to work eight hours a
day for the other two days (Tuesday and Thursday). This suggested schedule:
A. Fits with existing eight-hour nursing shift scheduling
B. Results in a 1.4 FTE factor
C. Both of the above
D. Neither of the above
36) It is commonly accepted that using an estimate provides a quick answer. It is also
recognized that the answer provided by an estimate may be:
A. More accurate
B. Less accurate
C. About the same as actual measurement
37) The scatter graph method of performing a mixed cost analysis:
A. Attempts to find the mixed costs average rate of variability
B. Uses a graph to plot the data points
C. Is not usually as accurate as the high-low method
D. A & B
E. B & C
F. All of the above
38) Discounted fee for service contracts may include fee schedules.
A. Correct
B. Not correct
C. Not applicable
39) When preparing a SWOT matrix for an Information Technology analysis
concerning the ICD-10 adoption issue, in which of the four components would the team
logically enter the governments incentive payment?
A. Strengths
B. Weaknesses
C. Opportunities
D. Threats
E. Any of the above
F. None of the above
40) Lakeside Medical Clinic has an opening for a full-time equivalent (forty hours per
week) shuttle bus driver. There is one single shuttle bus that operates from 9:00 am to
5:00 pm five days a week. It brings patients to the clinic entrance from far-flung
parking lots and bus stops. Joe and David propose to share this position. They suggest
that Joe would work seven hours per day on Monday, Wednesday and Friday, while
David would work ten hours per day on Tuesday and Thursdays, for a total of 41 hours
worked each week. Would the suggested schedule be acceptable for this FTE position?
A. Yes
B. No
C. Not applicable
41) The Days Receivable computation:
A. Represents the number of days in receivables
B. Is a common measure of billing performance
C. Is a common measure of collection performance
D. Is a measure of worth as well as performance
E. All of the above
F. None of the above
42) Interim reports:
A. Are generated some time during the organizations reporting period
B. Are generated at the end of the organizations reporting period
C. Have been verified, adjusted and balanced
D. Have been verified and adjusted but not yet balanced
E. A & C only
F. A & D only
G. B & C only
H. B & D only
43) Which of the following statements is generally correct regarding payments to
hospitals under the EHR Incentive Medicare program?
A. Payments to eligible hospitals may include a base amount plus an additional
formula-driven amount only if the hospital qualifies to receive the additional amount
B. Payments to all eligible hospitals will include a base amount and an additional
formula-driven amount
C. Neither of the above
44) The Waterford Clinic pays a flat monthly fee of $250 under a two-year contract for
certain computer services. This monthly fee of $250 is a:
A. Variable cost
B. Semivariable cost
C. Fixed cost
D. None of the above
45) The department responsible for the budget is information located in the plans:
A. Organization segment
B. Marketing segment
C. Financial segment
D. Either A or C
E. Any of the above
46) As a rule of thumb, if the answer to the following question is “yes”, than the cost is
a/an __________ cost: “If the operating unit (such as a department) did not exist, would
this cost not be in existence?”
47) Assume the following: Reserve for depreciation at current year end= $50,000;
Current years depreciation expense= $10,000; Original cost of fixed assets= $200,000;
Inventory at current year end= $20,000; Current years amortization expense= $5,000.
Calculate the net book value of the fixed assets. Correct answer is:
A $150,000
B $190,000
C $140,000
D None of the above
48) Regarding physician incentives under the HITECH Act, the “eligible professional”
incentives are paid only to physicians as defined by law who are “meaningful EHR
users”. It is important to note that these incentive payments will not be made to
__________ eligible professionals who might be otherwise eligible. (The determination
is made on the basis of site of service.)
49) An expense that provides service directly related to patient care is generally called
an __________ expense.
50) XYZ Healthcare’s Chief Financial Officer has calculated that XYZ must pay state
and federal income taxes this year at a rate of 25 percent. Depreciation on equipment
purchased for the radiology department will amount to $10,000 this year. Income tax
savings for the current year on this equipment will therefore amount to __________.
51) All transactions for the period reside in the __________.
52) LIFO inventory assumptions:
Beginning inventory of 10 units @$5 = $50
Purchases month #1 of 10 units @$10 = $100
Purchases month #2 of 10 units @$15 = $150
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 LIFO inventory method, what is the ending inventory amount?
A $150
B $100
C $50
D None of the above