NAB Review Operations

Question 1

Current Asset is? Give examples.

Answer 1

Cash or short lived asses e.g A.R.s and C.D’s

Usually used up within one year

Question 2

Fixed or non current assets are? Give examples

Answer 2

Assets that will NOT be used up within a year. E.g. building, equipment, etc.

Question 3

Capital

Answer 3

Term meaning funds to be used in business.

Real estate, buildings, and certain equipment can be included under certain conditions.

Question 4

Investment Capital

Answer 4

Cash used to purchase real estate and equipment, and to build- used to produce operation revenues.

Question 5

Working Capital

Answer 5

Excess of current assets over current liabilities. A measure of company’s ability to pay bills.

Question 6

Contract for personal services

Answer 6

The offer of money, consideration, acceptance. Spell out duties, authority, time, remuneration, escape clause, other terms.

Question 7

Difference between Liabilities and Current Liabilities.

Answer 7

Liabilities are debts or obligations owed.

Current Liabilities are debts or obligations owed DUE WITHIN ONE YEAR. E.G. fica taxes, FWT(federal withholding tax), notes payable and dividends.

Question 8

Long Term Liabilities

Answer 8

Debts or obligations NOT due for a period usually more than one year.

Mortgages, bonds, and prop liens.

Question 9

Net Worth

Answer 9

Total assets - total liabilities = Net worth

Question 10

Limited Liability Corporation (LLC)

Answer 10

Combines characteristics of corporations and partnerships. More flexible management.

Profit and losses can be allocated regardless of how stockholders are invested in the company.

Question 11

Difference between For Profit and Not for Profit

Answer 11

For Profits- Profits go back to the owners in forms of dividends.

Not for Profit- Profits in the organization go back in the operations of the organization.

Question 12

Capital Budget. Give examples. What’s the $ limit.

Answer 12

Includes real estate, buildings, equipment, usually limiting factor as re-coverage from expenses takes time

Medicare counts $5000 or more as capital if item has useful life in excess of one year.

Question 13

Cash Budget

Answer 13

Forecast of all cash receipts and disbursements. Considers schedule of cash inflows and payments of obligations.

SHOWS AVAIBLE CASH

Question 14

Operating Budget

Answer 14

Details of anticipated revenues (income) by service, and anticipated expenditures by category.

HELPS TO CONTINOUSLY STUDY AND CONTROL FINANCES.

Question 15

Accounting

Answer 15

Standards established by accountants and boards. Generally Accepted Accounting Principles (GAAP)

Nearly all facilities now use computerized accounting.

Includes bookkeeping, budgeting, reports, specials, studies, auditing, designing systems.

Question 16

Bookkeeping

Answer 16

Is the mechanical of recording business transactions.

Question 17

Cash Basis

Answer 17

Revenues/Expenditures recorded when actually received or paid out, except for depreciation expense.

Question 18

Accrual Basis

Answer 18

Revenue/Expenses recorded when incurred.

Medicare requires.

Question 19

Chart of Accounts

Answer 19

Complete list of all categories in the ledge-may include number-receivables and payables-like table of contents.

Question 20

Balance Sheet

Answer 20

Summarizes assets, liabilities, and stock holders’ equity.

Reflects SOLVENCY. Made up at ANY TIME.

Question 21

Basic step of accounting called Entries are what?

Answer 21

Entries- Transactions recorded as they occur in the journal.

Tells where to post.

Question 22

Posting is a basic step of account. What is Posting?

Answer 22

Transfer of debits and credits from journal to ledger which is charts of accounts-payables and receivables.

Question 23

Last basic step of accounting is Tabulate. What is Tabulate?

Answer 23

Account balances periodically.

Question 24

All assets costing _____ or more used more than one year are ________.

Answer 24

$5000

Depreciated

Question 25

Depreciation

Answer 25

Allocation of costs of tangible assets over a specified period of time.

Cause of deprecation is decrease in value due to use, obsolescence, action of elements.

Question 26

Straight- Line -Depreciation

Answer 26

Method distributes the same dollar amount of deprecation to expenses each year during the asset’s assigned life.

REQUIRED BY MEDICARE.

SLD= Cost - salvage value/assigned life

Question 27

Break-Even Analysis

Answer 27

The determining break even point when income equals expense-marginal return.

Analyze variable and fixed expenses.

Question 28

What are the 4 things to lower break even?

Answer 28

1. Reduce fixed cost
2. Increase prices where possible
3. Lower variable cost
   
   1. Work case-mix

Question 29

Percent Occupancy

Answer 29

Divide the number of possible patient days into the number of actual patient days then multiply by 100.

120 beds x 30 days (month) = 3600 possible days

3240 actual days = .90 x 100 = 90%

3600

Question 30

Payback period for capital investments aka Return on Investments or ROI

Answer 30

Divide original cost by saving per year

$10,000 OG = 6.3 years

$1,600 savings per year

Question 31

Nursing Costs

Answer 31

Total patients x cost ppd x number of days = Nursing cost

Question 32

Nursing homes bill Medicaid electronically on _____?

Answer 32

Form UB04

Failure to bill timely may result in forfeiture of that payment.

Question 33

Aging Accounts 1-30 days uncollectable %?

Answer 33

5%

Question 34

Aging Accounts 31-60 days amount & uncollectable?

Answer 34

10%

Question 35

Aging Accounts 61-90 days amount % uncollectable?

Answer 35

25&

Question 36

Aging Acounts 91-120 days amount % uncollectable?

Answer 36

50%

Question 37

Economic Order Quantity (EOQ)

Answer 37

Method helps on when and how much to order. Balances cost of reordering and carrying cost, and risk of running out.

Must consider shrinkage, spoilage, and theft.

Question 38

Perpetual Inventory

Answer 38

Known amount on hand and cost based on use at all times.

Best

Tighter control

Question 39

Example of Semi-Variable Expense

Answer 39

A facility’s census drops by 5 from one day to the next, the administrator may send an aide home to keep within HPPD numbers.

The employees wage can be described as SEMI-VARIABLE EXPENSE.