Question 1

Most corporations use the accrual basis of accounting.

True

False

Question 2

A hospital that is caring for a Medicare patient on an inpatient basis generally can increase its reimbursement by providing additional services.

True

False

Question 3

A department manager most often uses his or her hospital’s financial information for which of the following uses:

A. Assess the financial condition of the hospital

B. Assess the efficiency of operations

C. Evaluate the hospital’s stewardship

D. Assess the effectiveness of operations

Question 4

If an organization’s Board of Directors were to set aside assets to be used for replacement of plant and equipment, where would this be reflected on the balance sheet?

A. Assets Limited as to Use

B. Temporarily Restricted Net Assets

C. Permanently Restricted Net Assets

D. Liability

E. none of the above

Question 5

Proprietary hospitals often have low Community Value Index ® scores because:

A. They have higher prices

B. They have higher margins

C. They have lower costs

D. All of the above

Question 6

Some benefits under Medicare part A include hospital stays, skilled nursing care, and home health care.

True

False

Question 7

You have acquired a new CT scanner at a cost of $750,000. You expect to perform 7,000 procedures per year over the estimated 5-year life of the scanner. Assuming no salvage value and an annual increase in replacement cost of 10 percent, what capital charge per procedure should the hospital levy to provide for replacement cost in the second year? (Ignore financing costs or investment income offsets.)

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Question 8

Which of the following is the primary payer for acute-care (hospital) services?

A. Medicaid

B. Government payers (all sources)

C. Private payers

D. None of the above

Question 9

The earnings of a standard (“C”) corporation can be subject to double taxation.

True

False

Question 10

Which of the following tends to insulate management somewhat from the financial results of poor financial planning? (Pick the best answer.)

A. Capitated rates

B. Cost reimbursement

C. Bundled services

D. Charge payment

Question 11

Which of the following is the BEST example of a financial metric?

A. degree of innovation

B. employee empowerment

C. accreditation by the Joint Commission on Accreditation of Healthcare Organizations

D. total margin

E. length of stay

Question 12

Which of the following is the primary goal of a not-for-profit healthcare organization? Choose the best answer.

A. To serve the community through provision of health care services.

B. To balance revenues with expenses

C. To provide jobs for those in the community.

D. To deliver very high-quality health care services.

Question 14

A hospital incurs $10 million of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were $20 million. The net community benefit expense that would be reported in Schedule H of IRS Form 990 would be?

A. $10 million

B. $7 million

C. $3 million

D. None of the Above

Question 15

Both stockholders’ equity and net assets (or fund balance) represent the difference between total assets and total liabilities.

True

False

Question 16

What should be a firm’s primary long-term financial objective?

A. profit growth

B. debt growth

C. asset growth

D. equity growth

Question 17

What are the four basic financial statements?

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Question 18

One of the advantages of a nonprofit organization compared with an investor-owned company is that the investor-owned company is subject to federal income taxes, whereas the nonprofit organization is not.

True

False

Question 19

_____ is the most important financial metric to review to determine long-term financial viability.

Return on Equity

Question 20

 

Accounts receivable (net) increased by $500,000 during the year. This increase has what effect on cash flow?

A. Reduces it

B. Increases it

C. No effect