Finance Final
If a piece of equipment costs $110,000 and has a 10-year useful life along with a $10,000 salvage value, what is the annual depreciation expense using the straight-line depreciation method?
$10,000
Assume the following: Reserve for depreciation at current year end is $50,000; current year's depreciation expense is $10,000; original cost of fixed assets is $200,000; inventory at current year end is $20,000; current year's amortization expense is $5,000. What is the net book value of the fixed assets?
$150,000
Assume the following: Cost of goods sold is $130,000; purchases are $170,000; beginning inventory is $40,000; ending inventory is $80,000; current assets are $240,000. What is the average inventory, as used when calculating inventory turnover?
$60,000
Data mining and analysis of electronic health records (EHRs) and other healthcare information promotes:
Evidence-based treatments
True or False? Cloud-based systems facilitate adoption of electronic health records (EHRs).
False
True or False? Expenses in their broadest sense are both expired and unexpired costs.
False
True or False? In most healthcare organizations, an expense is paid at the point where the expense is incurred.
False
True or False? In the burden approach to computing full-time equivalents, desired net hours are deflated.
False
True or False? Joe has diabetes, yet he eats whatever he wants and drinks too much. Joe is considered to be an engaged patient.
False
True or False? Net worth is what the business is worth, net of receivables.
False
True or False? Revenue is considered to be outflow, and expenses are considered to be inflow.
False
True or False? Subsidiary schedules include a balance sheet and schedule of patient revenue.
False
True or False? When activity levels or volume of operations change, fixed costs are those that vary in direct proportion.
False
True or False? When real estate taxes are allocated, they are considered to be direct costs.
False
True or False? When the Last-In-First-Out (LIFO) inventory method is compared to the First-In-First-Out (FIFO) method, the LIFO ending inventory figure will be higher.
False
True or False? Within the annual management cycle, raw data has been adjusted and verified.
False
The Waterford Clinic pays a flat monthly fee of $250 under a 2-year contract for certain computer services. This monthly fee of $250 is a:
Fixed cost
Healthcare finance can be described as "a method of getting money in and out of the business." Which of these descriptions is correct?
Getting money out represents expenses, Getting money in represents revenues
A narrower interpretation of the term expense:
Groups expenses into categories
As part of the history of financial management, who developed a minimum-wage system in 1800 B.C.?
Hammurabi
As part of the history of financial management, who developed the concept of specialization for efficiency?
Plato
If the contribution margin is expressed as a percentage of net revenues, it is often called the:
Profit-volume (PV) ratio
The statement of revenue reflects a record of:
a record of transactions over a period of time.
Revenue represents:
actual cash inflows. expected cash inflows.
An owner has
all of these are correct
The burden approach allows the full cost of a position to be computed. When computing full-time equivalents (FTEs), the burden approach is used in the:
annualizing approach (to annualize staff positions).
Reports prepared in accordance with generally accepted accounting principles:
are intended for third-party use and are not necessary for managerial accounting for internal purposes.
The "language of finance" includes:
assets, liabilities, and net worth.
The term expense:
may include every expired cost that is deductible from revenue.
The term fund balance may be properly used by a:
not-for-profit organization. U.S. governmental entity.
Productive time is:
paid-for time performing job description functions.
Inpatient versus outpatient grouping of expenses:
recognizes different sites at which services are delivered and is a basic type of care setting grouping.
In the case of health care, revenue is typically earned by:
rendering services to patients
When operating expenses for an organization are reduced to a rate per day and compared with the amount in accounts payable, this computation:
results in a figure known as "days in accounts payable" and represents one measurement of operations within the organization.
Approaches used to compute full-time equivalents (FTEs) include the:
schedule position method and the annualizing method
Interoperability of electronic health records (EHRs) refers to:
the ability of two or more information systems to "talk" to each other.
True or False? Expenses represent expenditures that flow out of the organization.
true
Costs that vary in direct proportion to changes in the volume of operations are:
variable
When activity levels or volume of operations change, semivariable costs are those that:
vary, but not in direct proportion.
Assets are
what the organization owns and/or controls., economic resources with expected future benefits.
An effective social media strategy is integral to managing a healthcare organization's:
Reputation
The healthcare industry is primarily a(n):
Service industry
Which of the financial statements is compared to a diary in the text?
Statement of revenue and expense
The type of resource required to grow a healthcare organization's brand include:
Technological resources, human resources
Of the four segments that make a healthcare financial system work, which segment records evidence that an event has occurred?
The accounting system
Of the four segments that make a healthcare financial system work, which segment gathers evidence that an event has occurred?
The information system
Of the four segments that make a healthcare financial system work, which segment provides evidence that an event has occurred?
The original records
Of the four segments that make a healthcare financial system work, which one reports about the effect occurring from an event?
The reporting system
True or False? By their definition, not-for-profit organizations should not have equity.
True
True or False? Expenses represent a stream of expenditures that flow out of the organization.
True
True or False? If these costs for Riverside Nursing Facility were to be shown on a graph, the appropriate total monthly costs in dollars would appear on the vertical axis.
True
True or False? In most organizations, the human resources department is considered to be a support center.
True
True or False? Predetermined per-person payment indicates payment before the service is delivered.
True
True or False? Revenue typically represents earned amounts that are due to the organization's major business.
True
True or False? The balance sheet reflects a record of what an organization owns, what it owes, and what it is worth.
True
True or False? The break-even point is the point where the contribution margin equals the fixed costs.
True
True or False? The real key to understanding finance is understanding the elements of finance and their relationship to each other.
True
True or False? The statement of changes in fund balance/net worth is stated over a period of time.
True
True or False? The statement of revenue and expense is stated over a period of time.
True
True or False? When comparing the high-low method of analyzing mixed costs to the scatter graph method, the scatter graph finds the mixed cost's average rate of variability more accurately.
True
True or False? When creating a report to communicate financial information, the manager must typically use a standard format that is accepted in the accounting profession and uses terminology that is accepted in your area of the healthcare industry.
True
Healthcare employees work in shifts. If a position requires someone to be present around the clock (24 hours), then that position may be covered in:
Two or three shifts
In the Riverside Nursing Facility, what monthly cost changes proportionately with the number of patients in house (the volume)?
Variable cost
On the cost report, the central worksheets for cost finding are:
Worksheet A, B, B-1
Examples of indirect costs include the:
Administration, personnel, security
A chart of accounts format can contain:
All of these are correct
Examples of assets include:
All of these are correct
Major deductions from revenue include:
All of these are correct
Mixed costs may include
All of these are correct
Nonproductive time may include:
All of these are correct
Patient engagement is central to the evolution of value-based care. Techniques to engage the patient include:
All of these are correct
Regarding healthcare financial systems, the knowledgeable manager should be able to:
All of these are correct
The chart of accounts:
All of these are correct
The expected cash value of an asset at the end of its useful life may be known as:
All of these are correct
The manager needs to know the difference between fixed and variable costs in order to:
All of these are correct
The manager with a clinical viewpoint:
All of these are correct
Typical classifications used to group revenue include:
All of these are correct
When creating a report to communicate financial information, the manager should:
All of these are correct
When healthcare finance is considered "a method of getting money in and out of the business," the successful manager is able to achieve the most beneficial outcome by adjusting the inflow and outflow through which actions?
All of these are correct
Calculating the number of full-time equivalents (FTEs) by the schedule position method is used in:
All of theses are correct
Within the cost report, the primary purpose of a cost center is to help:
Allocate overhead
Which of the four major reports is stated at a particular point in time?
Balance sheet
Which of these financial statements is compared to a snapshot in the text?
Balance sheet
The actual cost is attached to staffing in the books and records through the:
Basic transaction record
The purchase of a fixed asset is recorded as a(n):
Capital expenditure
Revenues can be received in the form of:
Cash or credit
Indirect costs are sometimes called:
Common costs, joint costs
The manager with a process viewpoint generally is responsible for:
Data accumulation
Costs that can be traced are considered to be:
Direct costs
Business management as a discipline for educational purposes began in the United States in the:
1800s
"Average Inventory" is calculated as Beginning Inventory plus Ending Inventory divided by:
2
Assume the following: Beginning inventory is $4,000; ending inventory is $6,000; purchases equal $22,000; cost of goods sold is $20,000. What is the inventory turnover?
4.0
An individual inventory item is recognized as "cost of goods sold" when it:
Moves out of inventory
There are risks and challenges associated with healthcare consumers' use of social media. Examples may include:
difficulty in controlling the quality of information and patient privacy and security.
Liabilities are
economic obligations. debts that are payable. what the organization owes.
Productive time represents the:
employee's net hours on duty when performing job functions.
The growth of social media has been dramatic, and its use by hospitals has increased proportionately. Relative to the use of social media by hospitals, it can:
help the hospital manage the patient experience.
Inventory turnover:
is a ratio and shows how fast the inventory is sold.
The manager with a financial viewpoint:
is responsible for the reporting function of the organization.
The rise and proliferation of urgent care medicine has been fueled by:
long waits in the emergency room and a shortage of primary care physicians.