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Q:
capital expenditures involve the acquisition of assets that are long lasting, such as: a. land and buildings b. equipment with an appropriate number of years of useful life c. supplies d. operating expenses for the next year e. a & b f. a, b & c g. a, b & d
Q:
the hillwood health system owns six hospitals, the largest of which is greentree medical center. each of the six hospitals has its own capital expenditure budget and operating budget, and there is also a comprehensive health system financial budget. responsibility for the health systems comprehensive financial budget rests with which of the following employees? a. the greentree medical centers cfo b. the health systems controller c. the health systems vice president of finance d. any of the above
Q:
an organizations comprehensive, or overall, financial budget may typically encompass the: a. budget to acquire capital assets for future use (an eight to ten year future range) b. capital expenditures budgets for the next five years c. operations budget for the next twelve months d. a & b e. a & c f. b & c g. all of the above
Q:
a capital expenditure proposal for a new program: a. is sometimes allowed to disregard startup costs b. will be comparatively easier to prepare c. will typically be shorter than a proposal to replace equipment d. all of the above e. none of the above
Q:
the information flowing from these inputs to the capital expenditure budget would generally result in: a. an estimate of the capital dollars required b. placement into the capital expenditure plan if dollar amount was larger enough c. placement into the capital expenditure plan regardless of the dollar amount d. a revision of the organizations strategic plan e. a & b f. a & c g. a & d
Q:
the types of operating budget items that might require such inputs into the capital expenditure budget, depending upon the dollar amount required, include: a. space renovations b. additional capital equipment purchases c. capital equipment refurbished/upgraded d. all of the above e. none of the above
Q:
if operating budget items require additional capital equipment, then inputs to the capital expenditure budget may have to be taken into consideration. these inputs would typically include the following: a. capacity b. staffing plan c. operating revenue forecast d. a & b e. a & c f. b & c g. all of the above
Q:
the type of proposal affects its: a. size b. scope c. coordination with the strategic plan d. a & b e. a & c f. b & c
Q:
other types of capital expenditure proposals may also sometimes be paired as either/or choices. which of the following proposal types could also be easily presented as a pair for such either/or choices? a. acquiring capital assets for future use b. funding expansion of existing programs c. funding new programs d. a & b e. a & c f. b & c
Q:
certain types of capital expenditure proposals may sometimes be paired as either/or choices. which of the following proposal types could easily be presented as a pair for such either/or choices? a. acquiring new equipment b. upgrading existing equipment c. replacing existing equipment with new equipment d. a & b e. a & c f. b & c g. any of the above
Q:
the type of capital expenditure proposal that may be the most difficult to accomplish is a proposal to: a. acquire capital assets for future use b. fund new programs c. acquire new equipment d. none of the above
Q:
rationing available capital funds is often necessary. when evaluating capital expenditure budget proposals the following factors may commonly be considered: a. necessity for the request b. cost of capital to the organization c. return that could be realized on alternative investments d. all of the above e. a and b only
Q:
the process involved for capital expenditure funding requests varies according to the organization. the process may be influenced by: a. size b. the corporate culture c. politics d. all of the above e. a and b only
Q:
the capital expenditures budget usually consists of: a. spending for capital assets already acquired and in place b. spending for new capital assets c. both of the above d. neither of the above
Q:
building an operating budget includes steps that involve both __________ and actual construction of the budget.
Q:
within a departmental operating budget, general and administrative expenses will probably be mostly __________ costs.
Q:
in regard to working with operating budgets, there are two common types of responsibility centers: __________ centers and __________ centers.
Q:
the operating budget is the instrument through which __________ are quantified in financial terms.
Q:
foundation transactions should always be included in the operating budget.
Q:
capital expenditure budgets can cover a five- to ten-year period because they may take a futuristic view.
Q:
building a budget means making a series of assumptions. thus the budget-building process should end with a review of strategy and objectives.
Q:
dividing operating costs into fixed and variable is necessary: a. for the construction of a flexible budget b. for the construction of a static budget c. as a part of the advance preparation process d. a & c e. b & c f. all of the above
Q:
which of these statements is correct? a. flexible budgets can be used to review prior performance of a department b. static budgets may be used to plan a goal for the budget period c. both of the above d. neither of the above
Q:
the budget process should include: a. review of strategy b. review of objectives c. forecast of workload d. identifying special use of resources e. a & b f. b & c g. a, b & c h. all of the above
Q:
the following information is part of the budget preparation process: a. available resources b. budget scope c. budget format to be used d. a & c e. b & c f. all of the above g. none of the above
Q:
the concept of the flexible budget addresses: a. control b. planning c. workloads d. all of the above
Q:
to determine the relevant range of volume or activity, it is necessary to: a. define the relevant range b. analyze expected patterns of cost c. separate the costs into fixed or variable d. define a single level of activity e. a, b & c f. b, c & d g. all of the above
Q:
the computation of a static budget requires: a. three simple calculations b. two multi-level calculations c. one single calculation d. none of the above
Q:
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
Q:
in the case of healthcare organizations, volume generally means: a. number of patient days for inpatient services b. number of procedures for outpatient services c. number of patient days for outpatient services d. a & b e. b & c f. none of the above
Q:
if volume rises or falls, a. variable costs will not change b. fixed costs will not change (within a wide range) c. variable costs will change d. a & b e. b & c f. none of the above
Q:
at horizon hospital there are separate nursing departmental budgets for inpatient nursing and for outpatient nursing. how many of the following expenses are likely to be identified in these two nursing departmental budgets? a. nursing salaries b. nursing administration c. quality management d. data processing e. a & b f. c & d g. all of the above
Q:
how many of the following expenses are likely to be allocated in a nursing departments operating budget? a. dietary b. community relations c. human resources d. medical records e. a & b f. c & d g. b & c h. all of the above
Q:
within a managers departmental operating budget, which of the following will probably not be included? a. interest expense b. amortization of loan costs c. the departments computer service contracts d. a & b e. a & c f. all of the above
Q:
within a departmental operating budget, which of the following will probably be allocated? a. patient-related expense b. supporting patient care c. administrative expense d. a & b e. a & c f. all of the above
Q:
the south fork nursing facility has received a grant to provide additional social services for its residents. the grant requires separate accounting for these restricted funds. two extra staff have been hired using grant dollars. the administrator argues that the staff salaries should be included in the south fork operating budget so the full time equivalent counts will be correct. what is correct operating budget procedure this case? a. grant expenditures such as these staff salaries should not be included in south forks budget because the grant money is restricted and requires separate accounting b. it is all right to include all the grant operations in the south fork budget because the south fork budget is an operating budget c. as a compromise, include these two staff salaries in the budget, but not any other grant expenditures d. any of the above
Q:
the horizon healthcare foundation was formed to solicit donations that support certain initiatives of the horizon hospital. the foundation is a separate legal entity that meets all the relevant irs criteria for foundations. david, the hospital controller, has prepared an operating budget for the coming year that includes all revenues and expenses of the foundation within the hospitals budget. peggy, the hospital cfo, tells david to remove the foundation expenses and revenues. what is correct operating budget procedure in this case? a. leave the foundation revenues and expenses in the hospitals operating budget b. remove the foundation revenues and expenses because it is a separate legal entity c. remove the foundation revenues and expenses because peggy doesnt get along with the foundations director d. none of the above
Q:
operating budgets typically: a. contain expenses necessary to operate the facility b. reflect revenues from all sources c. have a futuristic view d. all of the above e. none of the above
Q:
a profit center operating budget may be expected to show: a. operating costs only b. operating costs and revenues c. operating costs and capital expenditures d. none of the above
Q:
the manager is responsible for a particular set of activities in which type of responsibility center? a. the profit center b. the cost center c. the revenue center d. a & b e. b & c f. none of the above
Q:
which of the following statements are correct? a. managers in cost center responsibility centers are responsible for controlling both costs and revenues b. managers in profit center responsibility centers are responsible for controlling both costs and revenues c. managers in profit center responsibility centers do not have to report to a supervisor above them d. none of the above
Q:
it is important to properly use the language of the world of finance. this is sometimes difficult to do when words sound and look much the same, but have very different meanings. accordingly, using what you know and what you have observed about healthcare finance: which of the following usages are correct? a. "capitol" represents the financial structure of the organization b. capital represents the financial structure of the organization c. capitol represents a building housing a legislative assembly (such as the u.s. congress) d. capital represents a building housing a legislative assembly (such as the u.s. congress) e. a & d f. b & c g. none of the above
Q:
jim, the radiology department director, believes the annual operating budgeting process is a tool used to increase his department through the addition of staff and supplies. susan, the laboratory department director, believes the annual operating budgeting process is a tool used to control costs. dr. smith, the emergency department director, considers the budgeting process a nuisance and believes he should simply increase all revenues and expenses by five percent for the coming year to achieve a budget. whose viewpoint represents the proper objective for the budgeting process? a. dr. smiths view b. jims view c. susans view d. none of the above
Q:
one objective for the budgeting process of hilltop hospital, a not-for-profit community hospital, is to create cost awareness: a. throughout the community it serves b. throughout its own organization c. by the federal government regulators d. by the state legislators that control medicaid costs
Q:
an organizations budgeting process should include the expression of its major policies: a. in writing and in qualitative terms b. in writing and in subjective terms c. both verbally and in writing d. both in writing and through training sessions e. none of the above
Q:
objectives of the budgeting process should include the provision of a: a. basis for evaluating financial performance in accordance with healthcare industry standards and policies b. basis for evaluation financial performance in accordance with the organizations own standards, policies and plans c. both of the above d. neither of the above
Q:
certain grant monies received by healthcare organizations may be transactions outside the operating budget because: a. they are restricted funds b. they may require separate accounting and reporting c. the american hospital association objectives for budgeting (listed in chapter 15) says they should not be commingled funds d. all of the above e. a and b only f. a and c only
Q:
a flexible budget: a. is adjusted, or flexed, to the level of output expected to be achieved during the budget period b. is based on a level of operations that will show change during the budget period c. looks toward a range of activity or volume d. all of the above e. a and b only f. a and c only
Q:
in regard to an operating budget, identifiable costs may generally include: a. supporting patient care b. direct patient care c. both of the above d. neither of the above
Q:
operating budgets generally deal with: a. long-term revenues b. short-term expenses c. the next year (a 12-month period) d. all of the above e. b and c only f. a and b only
Q:
static budgets are essentially based on a level of operations that: a. will show change during the budget period b. will not show change during the budget period c. either of the above
Q:
when verifying comparative data, you should retain your back-up data, because they are the __________ that supports your conclusions about the verification.
Q:
the use of industry standards for comparative purposes is of particular use for decision making because it positions the particular organization within a large grouping of facilities that provide a similar __________ of __________.
Q:
true comparability needs to meet three criteria, including unit measurement, __________ and __________.
Q:
the effect of inflation is computed through the use of an __________.
Q:
telephone expense for nine months on joe's departmental expense report amounts to $1,800. joe must now annualize expenses for a twelve-month period. joe's annualized twelve-month telephone expense would amount to $__________.
Q:
the compound interest table can be used to determine a cumulative inflation factor.
Q:
comparability requires consistency.
Q:
for financial reporting purposes, currencies are typically converted using the u.s.-dollar foreign exchange rates as of a certain date.
Q:
comparing your organizations information to that of other organizations is called: a. trend analysis b. common sizing c. either of the above d. neither of the above
Q:
when comparing current expenses to current budgets, a. the cfo (a manager at a higher level) will be responsible for analyzing and managing detailed budgets of the various departments b. the cfo may convert the comparative data into charts or graphs to better tell the story visually c. either of the above d. neither of the above
Q:
comparing current expenses to the current budget of a department, division, unit or program is typically the most common use of comparative data. a. correct b. not correct c not applicable
Q:
federal and state governments release a great deal of public information and statistics regarding the provision of health care. this information: a. cannot be used as standards because the information was provided by the government b. often contains industry standards that can be used by healthcare organizations c. neither of the above d. dont know
Q:
industry standards are used for: a. decision making b. comparative purposes c. both of the above d. neither of the above
Q:
standardized measures may include: a. work load measures b. sets of standards used by managed care plans c. hospital per-bed measures d. all of the above e. none of the above
Q:
the cumulative inflation factor helps to find the time value of money. a. correct b. not correct c. not applicable
Q:
the compound interest table is constructed to show a. percentages horizontally and years vertically b. years vertically and percentages horizontally c. neither of the above
Q:
the compound interest table shows the: a. future amount of $1.00 b. present value of $1.00 c. present value of an annuity of $1.00 d. none of the above
Q:
if you need to apply an inflation factor to a whole series of years, you must account for: a. the cumulative effect over time b. the cumulative effect of expenses c. trend analysis d. none of the above
Q:
an increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level is the definition of: a. inflation factor b. trend analysis c. inflation d. none of the above
Q:
the third step to annualize this expense for midtown clinic would be to: a. add $2,000 plus $200 equals $2,200 b. add $2,000 plus $400 equals $2,400 c. add $2,000 plus $400 equals $2,800 d. none of the above
Q:
the second step to annualize this expense for midtown clinic would be to: a. divide the answer from the first step by two b. divide the answer from the first step by ten c. multiply the answer from the first step by two d. multiply the answer from the first step by ten e. neither of the above
Q:
midtown clinics internet and telephone service expense for a ten-month period amounts to $2,000. to annualize this expense for a twelve-month period, the first step would be: a. multiply the $2,000 by twelve b. multiply the $2,000 by ten c. divide the $2,000 by twelve d. divide the $2,000 by ten e. none of the above
Q:
consistency criteria include proper treatment of time periods, inflation factors and verification. a. correct b. not correct c. not applicable
Q:
doctor smith is contemplating the purchase of dr. johnsons practice. frank, his office manager, is about to prepare a worksheet combining the results of both practices so dr. smith can review it. frank has a twelve-month financial statement for dr. smiths office and a nine-month financial statement from dr. johnsons office. which of the following approaches is correct? a. the nine-month statement should first be annualized b. consistency over time periods is not necessary, so frank can proceed c. neither of the above
Q:
the acme medical equipment company has used the last-in first-out (lifo) inventory method for the fifteen years they have existed. acmes operation has grown substantially, and the ceo believes that the company should now use the first-in first-out (fifo) inventory method for this coming year-end. would this action meet the requirements for consistency? a. yes b. no c. not applicable d. dont know
Q:
the name of japanese currency is the: a. yen b. yuan c. either of the above d. neither of the above
Q:
james is preparing a comparative industry report for his boss, who is the eastern health system cfo. the report is overdue, so james is in a hurry. one section of the report deals with the price of emergency services used by u.s. citizens when outside the borders of the u.s. james has gathered this information for emergency services obtained in canada, but the data is stated in canadian dollars. james has also gathered the equivalent information for emergency services obtained in mexico, but this data is stated in mexican pesos. he converts the canadian dollars to u.s. dollars using an exchange rate from the previous monday, or eight days ago. he then converts the pesos to u.s. dollars using an exchange rate from yesterday, or one day ago. does this section of james report contain comparable information? a. yes b. no c. not applicable
Q:
currency exchange rates may be expressed in one of two ways: either in u.s. dollars or per u.s. dollars. a. correct b. not correct c. not applicable
Q:
if the euro is trading at 1.2500 in u.s. dollars (this exchange rate is for illustration only), and you were spending your u.s. dollar in europe in part of the euro area, then to buy products priced in euros: a. it would take a third again as much (1.33) in u.s. dollars b. it would take one-quarter again as much (1.25) in u.s. dollars c. it would take three-quarters again as much in u.s. dollars d. none of the above