hca 341 midterm

Mercy Hospital operates an on-site laboratory. Total (direct and allocated indirect) cost associated with the laboratory is about $500,000. Of the $500,000, Mercy estimates that $350,000 could be eliminated if the laboratory were closed. What is the amount of indirect costs of the laboratory? Question 4 options: $150,000 $850,000 $350,000 $500,000

$150,000

Which of the following relationship is correct? TC: Total Costs (T)VC: (Total) Variable Costs FC: Fixed Costs AC: Average Costs V: Volume Question 3 options: VC=FC/V AC=TC/V TC=VC+FC TVC=AC*V

AC=TC/V

Which of the following does NOT belong to the income statement? Question 1 options: Contribution Depreciation Interest expenses Account receivable Patient service revenue

Account receivable

Which of the following is an asset? Question 2 options: Accounts payable Notes payable Accounts receivable Bank loan

Accounts receivable

Which of the following statement is correct? Question 4 options: Accrual accounting provides a better picture of the economic status Accrual accounting can mimic tax statement Cash accounting is complicated but efficient Cash accounting is required by GAAP

Accrual accounting provides a better picture of the economic status

Which of the following are characteristics of not-for-profit business? Question options: It can issue tax-exempt bond. It can issue municipal bond. It can receive zero tax contributions. Both A and B All A, B, and C

All A, B, and C

What is the most significant disadvantage of proprietorships and partnerships? It is difficult to acquire substantial amounts of capital It is difficult for owners to sell their interest in the business The owners have unlimited personal liability for the debts of the business All of the above

All of the above

The financial statement that contains information about an organization's assets and the financing used to acquire those assets is called: Question 4 options: Income statement Statement of cash flow Balance sheet Statement of change in equity

Balance sheet

Which of the following basic characteristics are required to make health insurance "work"? Question 3 options: Pooling of all losses Payment for all losses Risk transfer and indemnification Both A and C All A, B and C

Both A and C

Which of the following is true about tax laws for healthcare businesses? All hybrid form of businesses pays corporate income tax Not-for-profit corporations, for the most part, are not subject to income or property taxes Investor-owned corporations are subject to double taxation - once at the personal level, and again at the corporate level Both B and C

Both B and C

Traditional allocation process includes 4 steps. Which of the following is the third step? Question 3 options: Determine the allocation amount. Identify the cost pool. Determine the cost driver. Calculate the allocation rate.

Calculate the allocation rate.

The fee-for-service reimbursement method includes all of the following except: Question 1 options: Prospective payment Cost-based reimbursement Capitation Charge-based reimbursement

Capitation

The statement of cash flows is divided by all of the following categories except: Question 3 options: Cash flows from collection activities Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities

Cash flows from collection activities

Which of the following statement about partnership and corporation is correct? Question options: Corporation is hard to transfer ownership since it is large business. Partnership business has limited liability Partnership normally has three or more owners. Corporation faces double taxation for investor-owned business.

Corporation faces double taxation for investor-owned business.

Which of the following is NOT a profitability ratio? Question 1 options: Return on equity Total margin Return on assets Debt ratio

Debt ratio

Which of the following ratio can answer the question "Is the business using the right mix of debt and equity?" Question 2 options: Total assets turnover Current ratio Total margin Debt ratio

Debt ratio

Which of the following regarding income statement expenses is most correct? Question 3 options: It reports the amount of expenses used to purchase the supplies. Depreciation is a noncash expense. The leased equipment are not belong to the hospital, so we don't record that expenses in income statement. Salaries is a small part in all different categories of expenses.

Depreciation is a noncash expense.

This involves identifying, measuring, recording, and communicating in dollar terms the economic events and status of an organization: Question 2 options: Managerial Accounting Financial Accounting Accrual Accounting Cash Accounting

Financial Accounting

Which of the following is NOT a characteristics of managerial accounting system? Question 5 options: It does not report to the outsiders. It uses sub-unit data. It is designed for use by managers. It must adhere to GAAP standards.

It must adhere to GAAP standards.

Which of the following statements is correct regarding income statement? Question 5 options: It records the amount of revenue that has not yet been collected. It reports the operations at a given point in time. It uses cash accounting to record activities. It provides information about profitability.

It provides information about profitability.

Which of the following ratio analysis categories can answer the question "Can the business pay back all the obligations when they are due?" Question 3 options: Profitability Debt management Asset management Liquidity

Liquidity

Which of the following is related to skip prevention because the insured does not bear the full cost of the consequences? Question 2 options: Moral Hazard Health insurance Information asymmetry Adverse selection

Moral Hazard

Regarding managed care plans, which is NOT a characteristics of HMO? Question 5 options: Need copayment. Need a PCP. Need referral for specialist. Need coinsurance.

Need coinsurance.

Which of the following is NOT a financial activity? Question options: Operating management Financial reporting Financial risk management Contract management

Operating management

Which of the following statements about fee-for-service reimbursement is NOT correct? Question 4 options: Payment may be based on the number of covered lives. Payment may be on a per day basis. Payment may be charge based. Payment may be cost based.

Payment may be based on the number of covered lives.

Which of the following is NOT the responsibility of Treasurer? Question options: Manage financial risk Purchase capital for operation Manage bank loan or other debt Manage the money to be received

Purchase capital for operation

Which of the following allocation methods is conceptually the best? Question 5 options: Direct method. Indirect method. Reciprocal method. Step-down method.

Reciprocal method.

Which of the following service line costing methods is to calculate the cost for each unit, then multiple by the number of unit to calculate cost for each service? Question 1 options: Relative value unit costing Activity-based costing Cost-to-Charge Ratio Reciprocal-based costing

Relative value unit costing

Which of the following best describes the definition of the (total) contribution margin (CM)? Question 1 options: The total CM is defined as contribution margin multiplied by total revenue. The total CM is defined as contribution margin multiplied by total costs. The CM is defined as fixed cost minus variable cost. The CM is defined as revenue minus variable cost.

The CM is defined as revenue minus variable cost.

Which of the following cost drivers is the most effective for allocating housekeeping costs to patient services departments? Question 2 options: The space occupied by each department. The revenues generated by each department. The number of hours of housekeeping services consumed by each department. The salary expense of each department.

The number of hours of housekeeping services consumed by each department.

Which of the following statements about not-for-profit corporations is most correct? Question options: They pay dividends to owners. They can issue tax-exempt debt. They typically pay federal income taxes. They typically pay double taxation.

They can issue tax-exempt debt.

Du Pont analysis is that return on equity can be divided into three factors: Question 5 options: Equity multiplier, total margin, and debt ratio Total margin, fixed assets turnover, and equity multiplier Equity multiplier, total assets turnover, and return on assets Total assets turnover, total margin, and equity multiplier

Total assets turnover, total margin, and equity multiplier

The ratio used to measure the ability of a business to generate revenues from all sources and to control expenses is Question 4 options: Total margin Return on Equity Total assets turnover Debt ratio

Total margin

Which of the following statement is correct? Question 2 options: Under FFS, the more number of members the better. Under capitation, the more utilization the better. Under capitation, provider's financial risk is minimized if all costs are variable. Under capitation, provider's financial risk is minimized if all costs are fixed.

Under capitation, provider's financial risk is minimized if all costs are fixed.

The breakeven analysis is used to determine the Question 4 options: breakeven volume breakeven fixed cost breakeven variable cost breakeven revenue

breakeven volume

Which of the following activity leads to a cash flow in? Question 5 options: decrease in accounts payable increase in notes payable increase in accounts receivable decrease in accruals

increase in notes payable

Which of the following is a liability? Question 1 options: cash equivalents accounts receivable notes payable net property and equipment

notes payable