Which of the following is not a “principle” of financial accounting?

| October 22, 2018

Question
1
1. Which of the following is not a “principle” of financial accounting?

A. Historical cost
B. Revenue recognition
C. Continuity
D. Matching

Question
2
1. The cash budget focuses on which of the following major activities:
A. Purchasing of resources
B. Collection
C. Production/sale of service
D. All of the above

Question 3
1. A statement that reports inflows and outflows of cash during the accounting
period in the categories of operations, investing, and financing, is called
a(an):

A. Income statement
B. Statement of retained earnings
C. Balance sheet
D. Statement of cash flows

Question 4
1. The following is an example of a _____________ budget: “The budget for the
radiology department is different at 90 percent occupancy than at 80 percent
occupancy.”

A. rolling
B. forecast
C. flexible
D. fixed

Question
5
1. The controller in a hospital is usually responsible for which of the
following activities (choose all that apply):

A. Collection of accounts receivable
B. Developing budgets
C. Filing Medicare cost reports
D. Arranging hospital loans

Question
6
1. Strategic planning should _________ financial planning.

A. follow
B. precede
C. be contemporaneous with
D. None of the above

Question 7
1. What is net working capital?

A. Current assets less long-term liabilities
B. Current assets less current liabilities
C. The amount of permanent financing required to finance working capital or
current assets.
D. Both B and C

Question
8
1. The working capital cycle looks at which of the following:

A. Obtaining cash
B Turning cash into resources and paying bills
C. billing and collecting revenues earned
D. All of the above

Question
9
1. 18. You have just advance refunded $50 million of outstanding tax-exempt
revenue bonds with $40 million of new debt, which created a gain after
considering reimbursement effects of $5.0 million. What could account for this?

A. Higher interest rate on the refunding issue
B. Lower interest rate on the refunding issue
C. Positive arbitrage on the refunding issue
D. None of the above

Question
10
1. A not-for profit nursing home has total expenses of $20 million. Sales tax
in the state is 7%. Expenses are broken down into salaries ($12 million),
supplies ($6 million), and pharmacy ($2 million). The benefit received by the nursing
home from the sales tax exemption assuming that pharmacy items are exempt from
state sales tax is?

A. $1.4 million

B. $1.26 million

C. $420,000

D. $480,000

Question
11
1. A department manager most often uses his or her hospitals’ 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
5 points
Question 12
1. The heading of every financial statement should contain the:

A. name, title, and place of business

B. name, title, and specific date of statement

C. name, title, specific date of statement, and unit of
measurement

D. title, name, type of ownership, and unit of measurement
5 points
Question 13
1. Which of the following is not one of the four critical questions that must
be answered for dashboard reporting?

A. What is the firm’s strategic vision?

B. What is most important to the firm’s success?

C. What are the critical drivers that influence performance attainment?

D. What are the most relevant measures that reflect critical driver
relationships?

Question 14
1. 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

D. All of the Above

Question
15
1. What should be a firm’s primary long-term financial objective?

A. profit growth
B. debt growth
C. asset growth
D. equity growth

Question
16
1. The Catholic Healthcare Association recognizes which of the following as
legitimate areas of community benefit?

A. Bad Debts
B. Unreimbursed Medicare Costs
C. Both A and B
D. Neither A nor B

Question
17
1. Which of the following is an element of budgeted financial requirements that
is not included in budgeted expenses?

A. Interest expense

B. Increases in working capital

C. Labor expense

D. A and B

E. None of the above
Question 18
1. 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
5 points
Question 19
1. What of the following is not one of the characteristics of long-term debt financing?

A. Cost
B. Control
C. Risk
D. InventoryQuestion
1
1. Define working capital. What is the difference between working capital and
net working capital?
Press Tab to enter the content editor.

Question 2
1. What should be the basis of the annual budget?

A. The financial plan
B. Revenues
C. Profitability
D. None of the above

Question 3
1. One useful way to review the validity of a financial plan is to compare the
projected financial ratios with historical values.
True
False

Question
4
1. What is the working capital cycle and why must it be managed?

Question 5
1. In most years and for most health care firms, how is a health care firm
likely to increase its equity over the course of the year?

A. By selling shares of stock
B. By making a profit
C. By selling asset
D. By paying off debt

Question
6
1. A nursing home projects asset growth at 10 percent per year over the next 10
years. If it wishes to reduce its reliance on debt financing, what rate of
equity growth over the 10-year period will be desired?

A. 10 percent per year
B. Less than 10 percent per year
C. Greater than 10 percent per year
D. None of the above

Question 7
1. Which of the following is most directly related to strategic financial
planning?

A. ROI
B. ROE
C. EVA
D. None of the above
Question 8
1. Does adding debt increase or decrease the flexibility of a healthcare
provider? Why?

Question 9
1. What are the four phases of management control?
Question
10
1. How can a for-profit healthcare firm increase its equity?

A. Operating Income

B. Non-operating income

C. Issue stock

D. Create partnerships

E. All of the above

Question
11
1. Budgets normally cover a period of:

A. 5 years
B. 2 years
C. 3 years
D. 1 year
Question
12
1. What avenues are available for for-profit healthcare providers to increase
their equity position?

Question
13
1. What is the basis for determining how much investment in assets is necessary
for a health care firm?

A. Revenue

B. Expenses

C. Debt policy

D. ROE

Question
14
1. Define float. What are the major types of float?

Question 15
1. Which budgetary issue causes the most strife in all areas of a health care
organization?

A. Setting volume levels

B. Setting prices

C. Allocation of indirect costs

D. Deciding whether to use a fixed or flexible budget

Question 16
1. ________________ is a phase of management that is longer than budgeting, but
shorter than planning.

Question
17
1. Efficiency is a relationship between:

A. Outputs and organizational goals

B. Inputs and outputs

C. Inputs and organizational goals

D. None of the above

Question 18
1. What is the hospital’s objective with regards to collection and disbursement
float?

5 points
Question 19
1. The flexible budget attempts to improve the recognition of deviations caused
by changes in:

A. Volume

B. Hours worked

C. Prices

D. None of the above
5 points
Question 20
1. What is the purpose of disbursement policies?

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