FINANCE

Question 1

Why should an administrator get department heads involved in the budget making process?

1. To remain in compliance with federal certification requirements
2. To obtain more accurate cost estimates and more control over costs
3. To satisfy a generality accepted accounting principle (GAAP)
4. To conserve time in developing a budget

Answer 1

To obtain more accurate cost estimates and more control over costs

Question 2

A change in which one of the following is not likely to be the cause of a budget variance?

1. Case mix
2. Staff efficiency
3. Rates paid by third party payers
4. The personal needs allowance

Answer 2

The personal needs allowance

Question 3

“Assets are always equal to the sum of liabilities plus owner’s equity” is the basic concept in the organization of the?

1. Balance sheet
2. Income statement
3. General journal
4. Statement of operations

Answer 3

Balance sheet

Question 4

The financial success or failure of a nursing facility is usually measured by it?

1. Company earnings
2. Return on equity
3. Gross earning
4. Capital

Answer 4

Return on equity

Question 5

If a facility has a current ratio greater than 1, which of the following statements is most likely to be true?

1. It will be able to pay its bills on time
2. Its expenses exceed its revenues
3. It will be unable to qualify for a loan
4. It will be unable to qualify for a loan

Answer 5

It will be able to pay its bills on time

Question 6

A check should generally be issued only when which of the the following is available and properly signed?

1. Lien
2. Warranty
3. Pruchase order
4. General ledger

Answer 6

Purchase order

Question 7

The importance of matching revenue with the expenses incurred in generating those revenues is the reason for recording which one of the following?

1. Working capital
2. Current ratio
3. Depreciation
4. payback period

Answer 7

Depreciation

Question 8

Using the straight line method, what would be the annual depreciation expense for a piece of equipment having a cost of $6000, a manufacturer’s warranty for 2 years, and an estimated useful life of 6 years?

1. $1000
2. $3000
3. $6000
4. An amount that decreases each year over a six year period

Answer 8

$1000

Question 9

Which of the following is a current asset?

1. Gross earnings
2. Accounts receivable
3. Company car
4. Retained earnings

Answer 9

Accounts receivable

Question 10

Under the accrual basis of accounting, revenues are recorded when ___ and expenses are recorded when ___.

1. Cash is received – cash is paid out
2. Revenues are earned – expenses are incurred
3. Revenues exceed expenses – expenses exceed revenues
4. The fiscal year ends – expenses are incurred

Answer 10

Revenues are earned – expenses are incurred

Question 11

A generally accepted accounting principle (GAAP) would be violated if a company.

1. Used a fiscal year that did not correspond to the calendar year
2. Records as revenue amounts that have been earned but not yet received
3. Counts as assets its accounts receivable with a deduction for the proportion expected to be uncollectible
4. Used in its balance sheet an optimistic estimate of the current market value of its building

Answer 11

Counts as assets its accounts receivable with a deduction for the proportion expected to be uncollectible

Question 12

Last year’s food costs for a 100-bed facility were $146,820. The facility had an average occupancy rate of 85% that year. What was this facility’s food cost per patient day?

1. $3.80
2. $4.02
3. $4.73
4. $5.18

Answer 12

$4.73

Question 13

The Medicare benefit period ends when a beneficiary ?

1. Has had 100 days of SNF care
2. Begins a hospital stay
3. Has had 60 straight days with neither any hospital days nor SNF days
4. Stops paying the Part B premium

Answer 13

Has had 60 straight days with neither any hospital days nor SNF days

Question 14

Medicare Part A coverage of skilled nursing facility (SNF) care entails out of pocket payment by the patient of a daily amount for which days of SNF care in a benefit period?

1. None
2. 1st through 20th
3. 21st through 100th
4. Each day that the costs exceed a certain level

Answer 14

21st through 100th

Question 15

Which of the following statements is NOT true regarding the Medicare Prospective Payment System for Skilled Nursing Facilities?

1. Facilities located in different urban areas receive different rates that reflect differences in area wage rates
2. The system is case mix based
3. Facilities must submit bills to be reimbursed
4. There are separate protective rates for capital related costs

Answer 15

There are separate protective rates for capital related costs

Question 16

A RUG is a ?

1. Category in a resident classification system
2. Standardized resident assessment form
3. Cost report form
4. Billing form

Answer 16

Category in a resident classification system

Question 17

Completion of the Medicare cost report requires carrying out all except which of the following tasks?

1. Cost finding
2. Apportioning the costs for caring for Medicare residents from the costs for caring for non-Medicare residents
3. Aging of accounts receivable
4. Determination of allowable costs

Answer 17

Aging of accounts receivable

Question 18

The term for unintentional improper or excessive use of benefits of a health insurance program is?

1. Fraud
2. Abuse
3. Kickback
4. Grossing up

Answer 18

Abuse

Question 19

The process by which an individual becomes eligible for Medicaid by incurring medical expenses until personal resources fall below a specified ceiling is called?

1. Indemnity
2. Personal needs allowance
3. Spend down
4. Swapping

Answer 19

Spend down

Question 20

Which of the following statements regarding budgeting procedure is correct?

1. An operating budget projects only revenues from providing resident services
2. The operating budget includes planned expenditures for major building renovations
3. A cash budget may provide advance warning of months when cash outlays fall short of cash receipts
4. The capital budget includes expenses for all routing maintenance of equipment

Answer 20

A cash budget may provide advance warning of months when cash outlays fall short of cash receipts

Question 21

An example of a variable cost is?

1. Real estate taxes
2. Nursing supplies
3. Rent
4. Mortgage loan payments

Answer 21

Nursing supplies

Question 22

If the facility’s occupancy increases from 94% to 98%, the fixed cost per resident?

1. Decreases slightly
2. Remains the same
3. Increases slightly
4. Increases significantly

Answer 22

Decreases slightly

Question 23

A nursing home is considering the purchase of a new dish washing mating that costs $6000 and has a useful life of 10 years (with no salvage value). It is estimated that the machine will reduce annual operating costs by $800 over each of the next ten years. What is the payback period?

1. 0.75 years
2. 1.33 Years
3. 7.5 Years
4. 10 Years

Answer 23

7.5 years

Question 24

What happened in this scenario that should not have happened if financial recording and internal control principles were followed?
A facility receives a check by mail for services rendered to a resident. A staff member in the business office immediately stamps that check “For deposit only” in the name of the facility. She then makes entries in the cash receipts journal and in the resident’s account for later posting to the cash account and the accounts receivable account. Later in the day, this staff person goes to the bank, deposits the check in the facility account, and picks up a deposit receipt. On her return to the facility, she files the deposit receipt in the file for the is purpose.
1. The checks should not have been stamped
2. The wrong accounts were used to record the receipt of the check
3. The person who recorded the check receipt should not have been the same person who made the bank deposit
4. A staff member should not have gone to a bank to deposit the check

Answer 24

The person who recorded the check receipt should not have been the same person who made the bank deposit

Question 25

The type of insurance that would cover the facility if it were sued by a resident who was injured as the result of a medication error by a nurse employee is?

1. Patients compensation
2. Health insurance
3. General liability
4. Professional liability

Answer 25

Professional liability

Question 26

Business interruption insurance covers?

1. Losses resulting from employee dishonesty
2. Repair of wind damage to the building
3. Loss of revenue from having to keep beds empty while a unit undergoes repairs due to wind damage to a building
4. Claims resulting from negligence in the rendering of care to a resident

Answer 26

Loss of revenue from having to keep beds empty while a unit undergoes repairs due to wind damage to a building

Question 27

A W-4 form show each employee’s?

1. Number of claimed exemptions for withholding purposes
2. Gross earnings
3. Number of overtime hours
4. FICA tax withheld

Answer 27

Number of claimed exemptions for withholding purposes

Question 28

To obtain maximum reimbursement under the Medicare Prospective Payment System, a skilled nursing facility should do all except which of the following?

1. Record on the MDS all the information about the resident that can determine assignment to a RUG
2. Have physical therapists who serve Part A covered residents bill Medicare directly
3. Track costs by RUG categories
4. Collect MDS information more frequently for Part A covered residents than for other residents

Answer 28

Have physical therapists who serve Part A covered residents bill Medicare directly

Question 29

Which of the following practices is illegal for a Medicaid certified facility?

1. Offering a resident staff assistance in applying for Medicaid
2. Billing the resident for certain services or items when Medicaid is paying for that resident’s care
3. Asking a Medicaid recipient to help pay for care by turing over any private pension amounts that the resident may be receiving
4. Requiring the payment of the facility’s private pay rate for a certain number of months as a condition for admission

Answer 29

Requiring the payment of the facility’s private pay rate for a certain number of months as a condition for admission

Question 30

Which of the following is most likely to be part of the responsibilities of a compliance officer?

1. Rendering assistance to the residents’ advisory council
2. Coordinating the resident admission process and ensuring the exchange of all required information
3. Representing management in implementation of the grievance procedures under the facility’s contract with a labor union
4. Investigating and acting on certain kinds of problems that employees report regarding claims submissions to third party payers

Answer 30

Investigating and acting on certain kinds of problems that employees report regarding claims submissions to third party payers