Finance/Business Flashcards
The staff person responsible for ensuring that the business office runs smoothly is in the final analysis
The administrator
In general, the ownership patterns fo US nursing facilities in 2006
Were somewhat stabew
Generating reports on the financial standing of the nursing facility is generally assigned to
The accountant
Responsibility and blame for overspending in the department of nursing and in food services are typically assigned by the owners to the
Administrator
A set of records that lists each monetary transaction of the facility is normally referred to as
The books
The primary purpose of the Generally Accepted Accounting Principles is to
Maximize comparability of financial statements of different orgainzitions
An owner who takes unrecorded cash from the facilities daily cash intake to purchase a tablet for his daughter to use at college has violated the ___ concept
Entity
Instructing the financial manager to record assets at current market value and to not record patient bills expected to become uncollectible violates the ___ concept
Entity
Telling the accountant not to to record overtime paid from the cash box to employees working weekends is violating the __ concept
Full disclosure
Directing the accountant to move from January 1 date to a June 30 fiscal year date in order to minimize the negative image possibly created by an anticipated loss violates the ___ concept
Time perios
Allowing the bookkeeper to destroy vouchers showing payments made for meals to employees once these are recorded may violate the ___ concept
Objective evidence
Pieces of paper indicating money owed to or by the facility, bank statements, and similar pieces of paper or their electronic equivalents are known as
Source documents
An administrator who instructs the accountant to begin reporting facility finances by recording all expenditures and all receipts as they actually occur has decided to use the ___ system of accounting
Cash
It is difficult to recognize items such as depreciation and prepaid insurance in the ___ system of accounting
Cash
An administrator directing the accountant to record revenues when they are earned and expenses whey they are incurred regardless of the time the ash transaction takes place has decided to use the ___ approach to accounting
Accrual
Allowing the facility to accurately measure revenues earned after expenses have been paid or losses incurred by matching revenues and expenses for each time period is the advantage of the ___ system of accounting
Accrual
A summary of the nursing home’s financial well being within a time period is normally referred to as
The financial statements
If the administrator asked the bookkeeper for a list containing every account in the facility, the bookkeeper would hand the administrator the
Chart of accounts
Things owned by the facility are normally referred to a s
Assests
Things owed by the facility, its obligations, are normally referred to as
Liabilities
Money invested in the facility, also known as the facility’s net worth, is normally referred to as
Capital
If the administrator asks the accountant for the journals, the administrator wants to look at
The original entries
The new accountant informs the administrator that to simplify things, he as incorporate all purchases, that will be paid for the next few years into the accounts payable journal. The administrator should
Begin a search for a new accountatnt
Making a debit and a credit entry for each transaction is known as the
Double entry
Under double entry bookkeeping when a bill is sent to Ms. Jones for $3000 for the past months care the bookkeeper would normally record $3000 in the debit column as an increase in assets and
Record $3000 on the credit side as an increase in revenue
Using accrual accounting purchase of a 6 month supply of provisions would be entered into the
General journal
Under accrual accounting when the accountant shows the amount of medical supplies used during a month in the cash disbursements journal and the general journal the bookkeeper has made a
An adjusting entry
When errors are discovered in other journals, they can be corrected by entries into the
General journal
When the administrator asks the accountant for a summary of all debits and credits contained in the journals for the time period, the accountant should hand the ___ to the administrator
General ledger
At the end of a time period, when debits do not match credits exactly, the accountant can first assume that an error has been made in
Recording transactions
the Generally Accepted Accounting Principles GAAP do not normally require financial statements prepared for general distribution to include
Chart of accounts
The income statement show whether ___ were sufficient to cover expenses
Revenues
The accountant has lists the new building annex, the new central air conditioning system, and the supplies for the next 6 months as capital expenses. The administrator should
Look for a new accountant
At the end of a time period total expenses are subtracted from total revenues to compute the
Net income or profit loss
The accountant, upon successfully bringing the expense and revenue accounts to zero, has successfully
Closed the books
When the administrator asks the chief financial officer CFO for a statement showing the ending balance of the revenue and expense accounts,, the CFO should hand the ___ to the adminsttarot
Income statement
A financial statement in which the assets must equal the liability and capital accounts is known as the
Balance sheet
Any possession of the facility that will be or could be turned into cash with 12 months is a
Current asset
Because capital assets will not be liquidated any time soon, their current market value is not directly relevant relates to the ongoing concern concept and is known as
Historic cost
Depreciation is an expense associated with the use of
An asset
Bills from suppliers of foodstuffs or office supplies or janitorial service contractors are normally classified a month the
Current liabilities
When an administrator notes that there are $600,000 in notes payable on the financial reports the administrator knows these must be paid within
1 year
Funds that have been put into the facility by owners or others, and retained earnings that have been put back into the facility tare usually included when calculating the
Net worth
Except for for profit facilities paying taxes and the not for profit facility not paying income taxes, there are ___ in accounting and financial processes
No real differences
Not having to pay taxes gives not for profit facilities a slight
Competitive edge
The certified pub accountants end of year report for a 15 year old 120 bed for profit facility with no debt shows an excess of income over expenses of $95000. the owners would likely be
Very displeased with facility performance
When asked whether funds are readily available for a $75000 purchase and the accountant responds that the net worth is well over $800,000 and to go ahead with the purchase the administrator should
Ask for a statement of working capital
When the amount of current assets remaining after current liabilities have been subtracted is calculated the administrator has an idea of the ___ available to be spent
Working capital
When the CFO identifies trends in measures of financial performance of the facility by comparing the same relationships for several time periods he is doing
Ratio analyses
A facility has current assets of $409,898 and current liabilities of $367,000. It’s current ration is
1.1
A 1 year old, 120 bed for profit facility with a $2,500,000 mortgage at 7.4% reports a newt operating margin before depreciation of $25,000. In today’s financial market, the owner would likely be
Very pleased
Ratios, to be truly useful should be
Compared with industry averages over time
The new administrator in a private pay for profit facility is told by the accounts receivable are $105,800, and the net operating revenues are $334,000. On calculating the average collection period ration ,which turns out to be ___ days, the administrator should be ___
115/Upset
A 12 year old facility, largely out of debt, has $334,693 in operating revenues and $339,078 in operating expenses, yielding a net operating margin ratio of ___. The owners of this facility would likely feel this to be ____
0.013/Unacceptable
