NDFS Exam 2 - Quiz Questions

NPV is calculated using ten steps. True or False?

False

An effective interest rate is the stated annual interest rate of a loan. True or False?

False

Dividends are payments to creditors. True or False?

False

Horizontal analysis looks at the percentage change in a line item from one quarter to another. True or False?

False

Net assets to total assets ratio reflects an organization's ability to repay a loan. True or False?

False

Opportunity cost are revenues gained by forgoing other opportunities. True or False?

False

Liabilities are defined as: A. Financial obligations due within a year B. Cash and cash equivalents C. Patient accounts receivable D. Inventories

. Financial obligations due within a year

Liquidity ratios measure: A. A facility's ability to meet short term obligations, collect receivables and maintain cash position B. Operating revenues per adjusted discharge C. Operating expense per adjusted discharge D. Salary and benefit expense

A. A facility's ability to meet short term obligations, collect receivables and maintain cash position

Cash flows from investing activities includes: A. Purchase of plant property and equipment B. Accounts payable C. Accrued pension D. Estimated third party payer settlements

A. Purchase of plant property and equipment

Which of the following is not a provision that is expected to have a significant impact from the ACA? A. Requirement that all payments for health care be based on quality of services B. Requirement that almost all individuals have insurance coverage C. Establishment of payment mechanisms for bundled payments and value based purchasing system D. Requirement that states create insurance exchanges

A. Requirement that all payments for health care be based on quality of services

Other revenue refers to all of the following except: A. Salary and wages B. Appropriations and grants C. Income from investments D. Revenue from contributions

A. Salary and wages

Present value of an annuity refers to: A. What a series of equal payment in the future is worth today taking into account time value of money B. A factor that when multiplied by a stream of equal payments equals present value C. What an equal series of payments will be like at some future date using compound interest D. None of the above

A. What a series of equal payment in the future is worth today taking into account time value of money

Vertical analysis answers which general question? A. What percentage of one line item is another line item? B. Which analysis is best to use in financial decision making? C. What is the percentage change in a line item from one year to the next? D. Which financial statement is best to use in financial decision making?

A. What percentage of one line item is another line item?

Net assets do not include one of the following categories: A. Unrestricted B. Belated C. Temporary D. Permanent

B. Belated

Assets are defined as: A. Long term debt B. Cash, investments, inventory, and receivables C. Self-insurance reserves D. Accrued pension

B. Cash, investments, inventory, and receivables

ACA provides a _______________ benefits package: A. $0 B. Minimum C. Maximum D. $5,000

B. Minimum

Sunk costs are: A. Recoverable B. Not recoverable C. Indicators of future gains D. Management's poor decisions

B. Not recoverable

A statement of operations summarizes the organization's total assets, liabilities, and net assets in what time period? A. Last day of the accounting period B. Over a period of time C. Last quarter D. Annually

B. Over a period of time

ACA is the abbreviation for what legislation? A. Accountable Care Organizations B. Patient Protection and Affordable Care Act C. Activity Based Costing D. Administrative Cost Accounting

B. Patient Protection and Affordable Care Act

Operating margin ratio measures: A. How dependent the organization is on patient related income B. Profits earned from the organization's main line of business C. How much profit is earned for each dollar invested in assets D. Total operating expenses incurred from providing patient care services

B. Profits earned from the organization's main line of business

Capital appreciation is: A. The portion of the profits the company keeps B. When an investment is worth more when it is sold than when it was purchased C. An increase in liabilities D. None of the above

B. When an investment is worth more when it is sold than when it was purchased

Present value (PV) refers to: A. Worth in future of an amount invested today B. Worth today of future payment C. Worth in the future of a series of payments over time D. None of the above

B. Worth today of future payment

The number of uninsured U.S. citizens rose between 2001 and 2010 from: A. 5 million to 15 million B. 20 million to 32 million C. 36 million to 50 million D. 55 million to 65 million

C. 36 million to 50 million

Future value is determined using: A. Worth of a dollar today B. Calculations only on the original principle C. A compound interest method D. Using a simple interest method

C. A compound interest method

Patient-Centered Medical Home is: A. An expensive delivery system B. An indication of poor quality C. A partnership between primary care providers, patients, and families D. Not encouraged

C. A partnership between primary care providers, patients, and families

The time value of money refers to: A. Factors that show future value B. Factors that show past value C. Concept that a dollar received today is worth more than a dollar received in the future D. Concept that a dollar received today is worth less than a dollar received in the future

C. Concept that a dollar received today is worth more than a dollar received in the future

The payback method measures how long it will take to recover____________ investment. A. Total B. Past C. Initial D. Non-financial

C. Initial

Compound interest method refers to: A. Interest is calculated only on the original principle B. Interest is calculated on a dollar received today C. Interest is calculated on both the original principle and and on all interest accumulated since the beginning of interest period D. All of the above

C. Interest is calculated on both the original principle and and on all interest accumulated since the beginning of interest period

All of the following factors could contribute to a decrease in health care costs except: A. Pharmaceuticals going off patent B. Providers using health information technology in robust ways C. Medical technology continuing to develop new systems D. Hospitals overriding physician preference in supplies

C. Medical technology continuing to develop new systems

Balance Sheet for a non-profit contains all of the following except: A. Organization's assets B. Organization's liabilities C. Stockholder's equity D. Cash flow

C. Stockholder's equity

Accountable Care Organizations as part of ACA are: A. Mandatory B. Exclusive C. Voluntary D. State organizations

C. Voluntary

The statement of changes in net assets includes: A. Account balances B. Accounting methods C. Why there was a change from one year to the next in the entire net asset section of the balance sheet D. Expense determinations

C. Why there was a change from one year to the next in the entire net asset section of the balance sheet

Analyzing financial statements helps a health care organization to: A. Determine if profitable B. Determine the effectiveness in collecting receivables C. a & b D. None of the above

C. a & b

Categories of ratios include: A. Liquidity ratios B. Profitability ratios C. Capital structure ratios D. All of the above

D. All of the above

The HITECH Act (2009) was enacted with the goal of: A. Creating and expanding the current health care IT infrastructure B. Promoting electronic data exchange C. Substantially and rapidly increasing EHR adoption D. All of the above

D. All of the above

The strength(s) of the NPV analysis are: A. Answers in dollars, not years B. Accounts for all cash flows in the project C. Discounts at the cost of capital D. All of the above

D. All of the above

Which of the following is a basic financial statement? A. Balance Sheet B. Statement of Operations C. Statement of Cash Flows D. All of the above

D. All of the above

Which of the following is the goal of the U.S. health care system? A. Access B. Cost C. Quality D. All of the above

D. All of the above

The component(s) of a capital investment decision are: A. Determining if the investment is worth while B. Costs of investing C. Determining how to finance the investment D. Both a & c

D. Both a & c

Body of the statement of cash flows does not include: A. Cash flows from operating activities B. Cash flows from investing activities C. Cash flows from financing activities D. Current liabilities

D. Current liabilities

Trend analysis compares changes over: A. 3 month period B. 6 month period C. 1 year period D. Each year with the base year

D. Each year with the base year

Straight-line depreciation is a method that depreciates an asset a(n)__________________ amount each______________________ until it reaches its salvage value. A. Varied, quarter B. Equal, day C. Varied, year D. Equal, year

D. Equal, year

All of the following factors contribute to the rising cost of health care except: A. Aging population B. New and returning consumers in the marketplace C. Chronic Disease D. Providers embracing lean Six Sigma and other techniques to deliver better care with less resources

D. Providers embracing lean Six Sigma and other techniques to deliver better care with less resources

The payback method is in years, not dollars. True or False?

True

An annuity is a series of equal payments. True or False?

True

Higher debt increases financial risk by magnifying the returns on net asset or equity. True or False?

True

In a simple interest method the principle is the amount invested. True or False?

True

Interest determines how much an amount of money invested today will be worth in the future. True or False?

True

Ratio analysis is the expression of the relationship between two numbers as a single number. True or False?

True

Salvage value is the amount of cash to be received when an asset is sold, usually at the end of its useful life. True or False?

True