Finance / Budget Quick Facts

Question 1

The ___________ is the Chief Financial Officer of the facility.

Answer 1

Administrator

Question 2

The __________ are a set of records that , list , in a prescribed manner , each monetary transaction ( all money earned or spent) of the facility.

Answer 2

Books

Question 3

The ________ are then used to prepare the financial statement(s).

Answer 3

Books

Question 4

The ________ _________ are a summary of all the transactions recorded in the books, and they reflect the soundness of the organizations financial status;

the nursing facility’s financial well-being within a time frame.

Answer 4

financial statements

Question 5

The books and financial statement are prepared according to ______ _______ ________ __________.

These are consistent standards of accounting that allow the financial records to be understood by various parties.

Answer 5

GAAP ( Generally Accepted Accounting Principles )

Question 6

_________ ___________ - all financial information ( all money spent , earned, invested, or owed) must be shown in the financial records to represent its financial standing

Answer 6

Full Disclosure

Question 7

______ _________ - Pieces of paper that are evidence of transactions. They can be receipts , bills, bank statements , etc.

Answer 7

Source Documents

Question 8

What are the - Two systems of Accounting:

Answer 8

Cash and Accrual

Question 9

__________ = expenses are recorded when the cash is actually disbursed and revenues are recorded when the money is received.

Answer 9

Cash

It is difficult to recognize items as depreciation and prepaid insurance in the cash system of accounting

Question 10

________ = revenues are recorded when they are earned and expenses when they are incurred, regardless of the time the cash transactions taken place ( this is the system used for Medicare and most often used for residential and assisted living). Revenue is recognized when the services are provided, rather than when the cash is received.

Answer 10

Accrual

Allowing the facility to accurately measure revenues earned after expenses have been paid or losses incurred by the matching revenues and expenses for each time period is the advantage of the ACCRUAL system of accounting

Question 11

things “ owned “ by the facility.

Answer 11

Assets

Question 12

things “ owed “ by the facility ; or its obligations.

Answer 12

Liabilities

Question 13

money invested in the facility , also known as the facility’s net worth or equity.

Answer 13

Capital

Question 14

contains cash flows from operating, investing, and financing activities; as well as acts as a “ corporate checkbook”.

Answer 14

Cash Flow Statement

Question 15

assets minus liabilities

Answer 15

Net Worth

Question 16

net income divided by revenue

Answer 16

Net Profit Margin

Question 17

earnings from operations or other sources

Answer 17

Revenues

Question 18

cost of salaries, supplies, and so on, that have been used up

Answer 18

Expenses

Question 19

for each transaction, two entries are made in the appropriate journal, a debit and credit. When all debits are credits are totaled at the end of each month, they should be equal.

Answer 19

Double-entry book -keeping

Question 20

The __________ indicates whether or not an error has made in recording the transaction

Answer 20

trial balance

Question 21

At the end of each month, when all entries have been made in the journal accounts, the financial information is posted to the ____________.

Answer 21

General Ledger (GL)

Question 22

Thus, the ___________ is a summary of all debits and credits contained in the journals for the time period. It usually has a page for each account in the Chart of Accounts.

Answer 22

General Ledger ( GL)

Question 23

A list of names and numbers of all the accounts used in a Buisness. There typically are accounts for various subcategories ( assets, liabilities, owners equity, revenues and expenses )

Answer 23

Chart of Accounts

If the Administrator asked the book keeper for a list containing every account in the facility, the bookkeeper would hand the administrator the Chart of Accounts

Question 24

The Income Statement and the Balance Sheet are prepared directly from the ____________.

Answer 24

General Ledger (GL)

Question 25

The _______ ________ shows whether revenues were sufficient to cover expenses, whether the facility made or lost money during the time period. A measure of financial flows over time.

Answer 25

Income Statement

Question 26

The _______ ________ is a report summarizing a firms assets, liabilities, and owners equity at a specific date/point in time. It is a financial snapshot of an organization at a point in time.

Answer 26

Balance Sheet

Question 27

______ _______ _______ the point at which total revenues for a firm or a program are equal to the total expenses incurred.

Answer 27

Break-Even Point

Question 28

Earnings before interest, taxes, depreciation, amortization, rent. This shows cash flow available to pay interest, rent, and taxes after paying operational cost. It is a measure used by potential lenders of the credit-worthiness of an entity

Answer 28

EBITDAR

Question 29

Assets=Liabilities + Capital

Answer 29

The Accounting Equation

Question 30

Possessions of the facility that will be or can be turned into cash within 12 months

Answer 30

Current Assets

Question 31

_____________ is an expense associated with the use of an asset

Answer 31

Depreciation

Question 32

the number of years the item can be expected to be used by the facility

Answer 32

Useful Life

Question 33

annual depreciation expense

Answer 33

Historical cost divided by useful life

Question 34

= current assets - current liabilities

Answer 34

Working Capital

Question 35

= Current assets divided by current liabilities

Answer 35

Current Ratio

Question 36

= number of hours worked divided by number of patients/residents

Answer 36

Hours per patient day

Question 37

= cost in month divided by total patient days in month

Answer 37

Cost per patient day

Question 38

A system of ________ _________ is needed to measure the amount and type of supplies used by each department.

Answer 38

Inventory control

Question 39

= those cost that fluctuate directly and proportionately with changes in volume. If the volume is increased or decreased, _________ __________ will rise or fall ( food, nursing , Supplies )

Answer 39

Variable Cost

Question 40

= Those cost that will not change with fluctuations in the number of residents ( rent/mortgage payment, administrators salary)

Answer 40

Fixed cost

Question 41

= those directly attributed to a revenue center or directly providing resident care ( direct cost would include nursing salaries , payroll taxes, benefits, medical supplies)

Answer 41

Direct Cost

Question 42

= those that cannot be directly associated , yet support the functions of the residents care center ( the nursing department would be payroll, utility , housekeeping , dietary , laundry)

Answer 42

Indirect cost

Question 43

LIFO

Answer 43

Last in, First out,

Question 44

FIFO

Answer 44

First in, First out

Question 45

The first place transaction are recorded; the books of original entry ( cash, receipts , billing , accounts payable , payroll)

Answer 45

Journal

Question 46

Managed Care Financing
Managed care Organization (MCOs)
The fixed monthly payment that covers all services is called

Answer 46

Capitation