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
A facility with long term debt of $4,000,000 and a total equity of $3,000,000 has a debt to equity ratio of ___, which is___ the industry average
1.33/considerably above
Trends and patterns in the operation of a nursing facility can best be obtained by doing
Ratio and vertical analyses over time
To safeguard the finances of a facility, procedures should be arranged to establish a system of ___ so that employees review each others financial activiteis
Checks and balances
A useful form that summarizes the facility’s occupancy, listing daily admissions, discharges, and transfers is known as the
Daily census form
At the end of each year for facilities participating in Medicare, a Medicare Cost Reconciliation settlement occurs, in which
The facility receives or pays back money
The frozen food contractor arrives, places the order in the freezer, checks off the receiving slip, hands it to the appropriate kitchen employee who thanks the contractor and hands the receiving slip and purchase order copy to the director of food services.The administrator, on observing this, should
Be upset
Perhaps the only way to maintain an accurate count of supplies consumed and those remaining is to use
A perpetual inventory system
The use of LIFO (last in/ first out) to price inventory during a period of inflation will have the effect of making the value of the goods remaining in inventory
Lower
The largest directly controllable cost for the average administrator is
Labor
Payroll deductions are subtracted rom ___ to arrive at the employee’s ___ pay
Gross/net
Assets that can be capitalized or depreciated differ from the other assets of a facility in that they are used in operations for more than ___ and will not be converted into___ within the year
One time period/Cash
On discovering that the new accountant had set the actual purchase price paid (ex no tax, delivery, or similar costs) for the assets to be depreciated, the facility administrator would normally feel the accountant was ___
Not serving the facility well
One practical reason for using straight line depreciation is that ___
Most third party payers require it
Congress’ purpose for passing accelerated depreciation was to ___ of new facilities
Encourage more building
As a practical matter, most owners do not fund depreciation and treat it as
Money available to the facility to spend
Using several differing depreciation schedules for a single piece of equipment is ___ as an accounting behavior
Quite acceptable
Land ___ is a depreciable asset
Never
Medical supplies, food supplies, and postage for billing residents are ___ costs
Variable
The salary of the director of nursing and the administrator are examples of ___ costs
Fixed
in a facility having high fixed costs the pressure to keep beds filled is ___ in facilities with low fixed costs
Stronger than
For facility services such as physical therapy it is important to calculate the ____ cost in order to better analyze the cost effectiveness of such services
Breakeven
Nursing and physical therapy are normally thought of as ___ centers
Revenue
A financial analysis that yields to the administrator a representative picture of the entire expense of providing a service (offering adult day care services) is known as
Cost finding
Only when appropriate___ has been achieved can an accurate job of ___ be accomplished
Cost finding/rate setting
In order to develop a reasonable estimate of income and expenses for a coming time period it is important to do both a(an) ___ budget and a ___ budget
Expense/revenue
Because income and expenses vary from time period to time period, it is desirable to project a ___ budget
Cash
Plans for expenditures for buildings, major equipment, and the like are normally part of the ___ budget
Capital
A method of measuring the potential profitability of an investment, calculated by dividing the net income by the investment, is the
ARR (accounting rate of return)
A revision of an accounting forecast or assumption about the facility’s expected or experienced performance is a(an)
Change in accounting estimate
The portion of a brand in the form of a symbol, design, or distinctive coloring or lettering, also called a logo, is an organization’s
Brand mark
The administrator decides to offer newer forms of physical therapy that reduce use of currently used physical therapy methods. The administrator has ___ the current methods
Canibalized
A market that is so competitive that all its participants have virtually no control over price is known as
Perfect competition
The administrator asks the business manager to divide the net income after any taxes by the noncurrent liabilities plus owner’s equity The administrator wants the
Return on invested capital estimate
A method of determining the optimum amount of materials that needs to be ordered on a regular basis is known as the
Economic order quantity
When governments use their powers to keep the price either above or below the equilibrium point is known as
Price controls
Short term securities (2 days to 270 days) issued by corporations, banks, and other borrowing institutions to raise short-term working capital is known as
Commercial paper
The administrator asks the bank for an instrument stating that the bank that has granted the holder the amount of credit equal to the face amount wants a
Letter fo credit
The facility has issued a debt obligation to pay a specific amount on a stated date. The facility has issued
Bonds
When the financial manager classifies an expense as an asset because it benefits the facility for more than 1 year, the financial manager has ___ that expense
Capitalized
The administrator wishes to lease a building and acquire substantial property rights on the process. The administrator seeks
A capital lease
The administrator has borrowed cash for an agreed upon purpose between a lender and borrower. The administrator now has a
Note
The chain issues stocks and bonds that ca be converted into capital stock at some future date. It has issued
Convertible securities
The chain “buys back” a portion of its outstanding stock by giving one new share in place of each four previously held shares. The chain has accomplished share in place of each four previously held shares. The chain has accomplished a(an)
Reverse split
The administrator seeks to be licensed without having to meet all the conditions new entrants would have to meet. The administrator seeks to be
Grandfathered
The administrator holds a number of assets, such as bonds or easily sold stock as investments. The administrator has substantial
Cash equivalents
The instrument that creates a corporate under the laws of a state is known as the
Articles of incorporations
The three owners hold all the shares in the facility. They have a
privately held company
Statues are laws
Passed by legislatures
Normally courts of appeals do not have
Original jurisdiction
Statutes and subsequent regulations are collected in
The code
Generally, the lowest level of the court system is the ___ court
Magistrate’s
To set a person or corporation free of accusations is to
Acquit
A statement in writing given under oath before a notary public is an
Affidavit
The coming into court of a person being summoned to do so is a(an)
Discovery
An impartial person chosen by the parties to an argument who agree to abide by that person’s decision is a(an)
Arbitrator
A latin phrase meaning to stand by earlier court decisions is
Res judicata
A verdict given by a jury at the direction of a judge is a(an)
Directed verdict
An application to the court asking for an action favorable to one’s side is
A motion
When the employee is acting within the control or scope of the employer, the employer is responsible for the acts of the employee under the concept of
Strict liability
A written publication that exposes someone to public scorn, hatred, contempt, or ridicule is
Libel
An early step in a criminal procedure during which the defendant is formally charged with an offense is a(an)
Arraignment
Conduct giving rise to a cause for legal action is
Actionable
When parties to a lawsuit who are dissatisfied with the court’s decision ask a higher court to review the decision is knows as an
Appeal
A district attorney may bring assault charges for the purpose of
Punishment
Damages for proven losses are known as ___ damages
Actual
A fee paid in advance to an attorney for services on a case is known as a
Retainer
A concept in torts used as a defense by the defendant against the plaintiff is an assumption of
The risk
Consent given after full information regarding the matter has been provided is known as ___ consent
Informed
Spoken statements leading to actual damages implying crime, or unchastity, or relating to a person’s profession or business are known as
slander
A reckless disregard for human life, a state of mind that accompanies a wrongful act in which the resulting harm was intended, is known as
Malice
A public official, either elected or appointed, who conducts cases against persons accused of crimes is known as a
Prosecuter
A written order from a judge permitting certain law enforcement officers to look for certain things or persons is a
Search warrant
A person who give evidence before a court and swears that testimony is true is a
Witness
A ___ exists when. legal duty is owed another, that duty is breached, and harm results
Tort
A written order from a judge having authority in that jurisdiction for the arrest of a person is known as a
Warrant
The concept, in both civil and criminal law, that the employer is responsible without the employee having to show employer fault, and that normally applies to an ultra hazardous situation is
Strict liability
The range of employee activities held by the courts to be the legal responsibility of the employer, essentially any act performed in the process of carrying out ones duties is known as
Scope of employment
Laws that generally establish employer responsibility with our regard to fault or negligence for employees illnesses or injuries that arise out of performance of the job are known as
Worker’s Compensation Act
Statutes in various states setting forth the extent to which employers are liable in regard to their employees are
Employer’s Liability Acts
Under the concept of respondeat superior, the administration of the facility is as ___ responsible for the acts of contracted services as for acts of full time employees
Legally
It normally falls to the ___ to ensure that contracted services are coordinated and supervised on an ongoing basis
Administrator
