Financial Management 1 Flashcards
1
Q
1. Which of the following is a financial expression of the practice's plan for the next year? A. Operating budget. B. Income statement. C. Statement of cash flow. D. Balance sheet.
A
A. Operating budget
2
Q
- Zero based budgeting is based on the premise that every item in the budget must be justified for which of the following?
A. Increases greater than zero for the budget year.
B. Increases less than zero from the prior year.
C. Items greater than zero for the budget year.
D. Increases greater than zero from the prior year.
A
C. Items greater than zero for the budget year
3
Q
3. How do semi-variable costs typically increase? A. Independent of volume. B. Directly proportionate to providers. C. Ina "stepwise" fashion. D. Directly proportionate to volume
A
C. Ina “stepwise” fashion
4
Q
4. Which of the following stipulations affects the flexibility of a loan document? A. Late charges. B. Amortization schedule. C. Prepayment penalty. D. Interest rate.
A
C. Prepayment penalty
5
Q
- What is the purpose of Generally Accepted Auditing Standards?
A. To gauge the quality of the audited organization’s financial statements.
B. To gauge the quality of the auditor’s performance.
C. To gauge the quality of the audited organization’s operations.
D. To gauge the quality of the audited organization’s compliance with regulations.
A
B. To gauge the quality of the auditor’s performance
6
Q
- Good accounts receivable management includes which of the following?
A. Inclusion of pre-payments in analysis efforts.
B. Unsubstantiated write-offs.
C. Willingness to bill third party payers.
D. Specific and documented follow-up activities.
A
D. Specific and documented follow-up activities.
7
Q
- When are discounts for self-pay patients allowed?
A. If the patient can prove financial hardship.
B. If the patient is billed once for the full charge.
C. If the patient has not applied for federal assistance.
D. If the patient has a high deductible.
A
A. If the patient can prove financial hardship
8
Q
- In modified cash accounting, the operating margin is calculated by using which of the following ratios?
A. Total debt divided by total assets.
B. Net income divided by total assets.
C. Income derived from operations divided by revenues.
D. Net income divided by revenues.
A
C. Income derived from operations divided by revenues
9
Q
- Which defines short-term investments?
A. A financial asset that matures in one year or less.
B. A financial liability that has no maturity.
C. A financial asset that matures in five years or less.
D. A financial asset that matures in three years or less.
A
A. A financial asset that matures in one year or less.
10
Q
- Which of the following best defines how gross profit margin is calculated?
A. Total revenue less the cost of goods sold.
B. Total revenue less employee salaries.
C. Net revenue less forecasted losses.
D. Net revenue less balance of bank account.
A
A. Total revenue less the cost of goods sold
11
Q
11. Which tax is related to non-payroll disbursements? A. Medicare tax. B. Use tax. C. FICA tax. D. Unemployment tax.
A
B. Use tax.
12
Q
12. What calculation is needed to evaluate a medical practice's fee schedule with that of a payer using the resource based relative value scale? A. Relative value units. B. Payer conversion factor. C. Work value. D. Geographic practice cost indices.
A
B. Payer conversion factor
13
Q
- When a managed care plan combines a health maintenance organization (HMO) product with a point-of-service option, what is the major risk in accepting capitation?
A. Higher than expected costs for emergency room services.
B. Stop-loss levels that is set too high.
C. The cost of out-of-network services.
D. Over utilization of services by patients
A
D. Over utilization of services by patients
14
Q
- What rule must always be followed to ensure that proper internal cash controls are maintained?
A. All cash disbursement checks must be pre-numbered.
B. All support staff must be bonded.
C. All cash receipts must be deposited weekly.
D. All cash balances must be verified monthly.
A
A. All cash disbursement checks must be pre-numbered
15
Q
- What is shareholder’s equity?
A. The amount that shareholders have contributed to the medical practice.
B. The amount that the practice can be sold for, after all debts are paid.
C. The difference between assets and liabilities on the balance sheet.
D. The difference between revenues and expenses on the income statement.
A
C. The difference between assets and liabilities on the balance sheet
Depending on the legal structure of an organization, owner’s equity may include contributed capital, undistributed earnings, and different classes of stock, donated capital, or retained earnings. In general, stockholder’s equity represents the difference between assets and liabilities on the balance sheet.
