NR 533 | Week 7 Business Plan Assignment Chamberlain College of Nursing | 2026/2027
NR 533 WEEK 7 BUSINESS PLAN ASSIGNMENT (2026/2027)
Financial Management in Healthcare Organizations
Chamberlain College of Nursing — Comprehensive Examination
Total Questions: 75 | Cognitive Distribution: 20% Recall, 50% Application, 30% Analysis | Format: Multiple Choice (A-D, single
best answer) | Special Inclusions: 15 calculation-based, 10 scenario-based business plan case studies, 10 reimbursement/RCM
questions
Section 1: Healthcare Financial Management Fundamentals
Core concepts in healthcare financial management — accounting principles, financial statements, financial ratios, cost
classification, cost allocation, and GAAP-based revenue recognition. 15 questions including financial ratio calculations.
*Q1:* A nurse manager is reviewing a hospital's financial statements under Generally Accepted Accounting
Principles (GAAP). Which accounting basis is required by GAAP for external financial reporting in healthcare
organizations?
A. Cash basis accounting, because it tracks actual cash flow
B. Accrual basis accounting, because revenues are recorded when earned and expenses when incurred
[CORRECT]
C. Modified cash basis, because it blends cash and accrual methods
D. Managerial basis, because it supports internal decision-making
Correct Answer: B
Rationale: Under GAAP, healthcare organizations must use accrual accounting, recognizing revenues when earned
(e.g., services rendered) and expenses when incurred, regardless of when cash changes hands. The cash basis (A) is
non-GAAP and used only by very small practices. Modified cash (C) and managerial basis (D) are not GAAP-compliant
for external reporting. The NR 533 curriculum emphasizes accrual accounting as foundational to financial
statements used in business plan development.
*Q2:* On a hospital balance sheet, which of the following is correctly classified as a long-term liability?
A. Accounts payable to medical suppliers
B. Accrued payroll for the current pay period
C. Mortgage payable on a patient care building, due in 15 years [CORRECT]
D. Patient deposits for services not yet rendered
Correct Answer: C
Rationale: Long-term liabilities are obligations due beyond one year. A 15-year mortgage payable (C) is the classic
long-term liability. Accounts payable (A), accrued payroll (B), and patient deposits (D) are all current liabilities
settled within one year or the operating cycle. The NR 533 financial statements module requires distinguishing
current vs. long-term classifications to assess solvency and capital structure.
Financial Management in Healthcare Organizations Page 1
,NR 533 | Week 7 Business Plan Assignment Chamberlain College of Nursing | 2026/2027
*Q3:* Which financial statement reports a healthcare organization's revenues, expenses, and net income
over a specific period of time?
A. Balance sheet
B. Statement of cash flows
C. Income statement (statement of operations) [CORRECT]
D. Statement of changes in net assets
Correct Answer: C
Rationale: The income statement, also called the statement of operations (C), reports revenues, expenses, and net
income over a period (e.g., fiscal year). The balance sheet (A) is a snapshot at a point in time showing assets,
liabilities, and net assets. The statement of cash flows (B) tracks cash movements. Statement of changes in net
assets (D) shows equity changes. NR 533 emphasizes the income statement as the primary measure of operational
profitability used in business plan projections.
*Q4:* A clinic's statement of cash flows shows negative cash flow from operating activities for three
consecutive quarters despite reporting positive net income on the income statement. What is the most
likely explanation?
A. The clinic is improperly recognizing revenue
B. The clinic has high non-cash expenses and is collecting accounts receivable slowly [CORRECT]
C. The clinic has too much long-term debt
D. The clinic is over-investing in capital equipment
Correct Answer: B
Rationale: A common scenario in healthcare finance is positive accrual net income combined with negative
operating cash flow, driven by slow accounts receivable collection and large non-cash expenses like depreciation (B).
This signals a liquidity crisis even when profitability looks healthy. Option A assumes fraud without evidence; C and
D affect financing/investing activities, not operating cash flow. NR 533 stresses that cash flow, not net income,
determines organizational survival and is central to business plan feasibility analysis.
*Q5:* A surgical unit's costs include RN salaries, surgical supplies, and equipment depreciation. Which cost
classification correctly groups these as fixed, variable, and semi-variable (mixed)?
A. Salaries = variable; supplies = fixed; depreciation = semi-variable
B. Salaries = fixed (within relevant range); supplies = variable; depreciation = fixed [CORRECT]
C. Salaries = semi-variable; supplies = semi-variable; depreciation = variable
D. All three are variable costs because they change with volume
Correct Answer: B
Rationale: Within a relevant range, RN salaries are typically fixed (staffing is committed regardless of daily volume),
surgical supplies vary directly with case volume (variable), and depreciation is a fixed non-cash expense tied to the
asset's useful life (B). Calling salaries variable (A) confuses committed labor with per-diem staffing; (C) misclassifies
all three. NR 533 cost classification principles are essential for break-even analysis and flexible budgeting in business
plans.
Financial Management in Healthcare Organizations Page 2
, NR 533 | Week 7 Business Plan Assignment Chamberlain College of Nursing | 2026/2027
*Q6:* In a hospital cost accounting system, the salary of the Chief Nursing Officer (CNO) is best classified as:
A. A direct cost of the medical-surgical unit
B. A direct cost of the operating room
C. An indirect cost allocated across multiple cost centers [CORRECT]
D. A variable cost of patient care
Correct Answer: C
Rationale: The CNO's salary benefits multiple departments and cannot be traced to a single cost center, so it is an
indirect cost allocated via a cost-allocation methodology such as square footage, FTEs, or relative value units (C).
Direct costs (A and B) are traceable to a specific department. The CNO salary is also a fixed, not variable, cost (D). NR
533 cost allocation principles govern how overhead is distributed for accurate service-line costing and business plan
pro formas.
*Q7:* A hospital has current assets of $4,500,000 and current liabilities of $2,500,000. What is the current
ratio, and what does it indicate about liquidity?
A. 0.56 — the hospital has insufficient liquidity to cover short-term obligations
B. 1.8 — the hospital has $1.80 in current assets for every $1 of current liabilities, indicating adequate liquidity
[CORRECT]
C. 2.5 — the hospital is highly liquid and likely over-capitalized
D. 4.5 — the hospital can cover current liabilities five times over
Correct Answer: B
Rationale: Current ratio = current assets / current liabilities = $4,500,000 / $2,500,000 = 1.8 (B). A ratio between 1.5
and 2.0 is generally considered healthy for healthcare organizations. Option A inverts the formula; C and D use
wrong numerators. The NR 533 liquidity ratio module uses current ratio to assess short-term solvency, a critical
metric in business plan financial projections.
*Q8:* A healthcare system reports total liabilities of $12,000,000 and total equity (net assets) of
$8,000,000. Calculate the debt-to-equity ratio and interpret its meaning.
A. 0.67 — conservative capital structure with low leverage
B. 1.5 — the organization finances $1.50 of debt for every $1 of equity, indicating moderate-to-high leverage
[CORRECT]
C. 2.5 — extremely high leverage signaling financial distress
D. 0.40 — minimal debt usage
Correct Answer: B
Rationale: Debt-to-equity = total liabilities / total equity = $12,000,000 / $8,000,000 = 1.5 (B). A ratio above 1.0
means the organization relies more on debt than equity financing, which increases financial risk but may amplify
returns. Option A inverts the ratio; C and D use incorrect figures. NR 533 solvency analysis uses debt-to-equity to
evaluate long-term financial stability and capital structure decisions in business plans.
Financial Management in Healthcare Organizations Page 3
NR 533 WEEK 7 BUSINESS PLAN ASSIGNMENT (2026/2027)
Financial Management in Healthcare Organizations
Chamberlain College of Nursing — Comprehensive Examination
Total Questions: 75 | Cognitive Distribution: 20% Recall, 50% Application, 30% Analysis | Format: Multiple Choice (A-D, single
best answer) | Special Inclusions: 15 calculation-based, 10 scenario-based business plan case studies, 10 reimbursement/RCM
questions
Section 1: Healthcare Financial Management Fundamentals
Core concepts in healthcare financial management — accounting principles, financial statements, financial ratios, cost
classification, cost allocation, and GAAP-based revenue recognition. 15 questions including financial ratio calculations.
*Q1:* A nurse manager is reviewing a hospital's financial statements under Generally Accepted Accounting
Principles (GAAP). Which accounting basis is required by GAAP for external financial reporting in healthcare
organizations?
A. Cash basis accounting, because it tracks actual cash flow
B. Accrual basis accounting, because revenues are recorded when earned and expenses when incurred
[CORRECT]
C. Modified cash basis, because it blends cash and accrual methods
D. Managerial basis, because it supports internal decision-making
Correct Answer: B
Rationale: Under GAAP, healthcare organizations must use accrual accounting, recognizing revenues when earned
(e.g., services rendered) and expenses when incurred, regardless of when cash changes hands. The cash basis (A) is
non-GAAP and used only by very small practices. Modified cash (C) and managerial basis (D) are not GAAP-compliant
for external reporting. The NR 533 curriculum emphasizes accrual accounting as foundational to financial
statements used in business plan development.
*Q2:* On a hospital balance sheet, which of the following is correctly classified as a long-term liability?
A. Accounts payable to medical suppliers
B. Accrued payroll for the current pay period
C. Mortgage payable on a patient care building, due in 15 years [CORRECT]
D. Patient deposits for services not yet rendered
Correct Answer: C
Rationale: Long-term liabilities are obligations due beyond one year. A 15-year mortgage payable (C) is the classic
long-term liability. Accounts payable (A), accrued payroll (B), and patient deposits (D) are all current liabilities
settled within one year or the operating cycle. The NR 533 financial statements module requires distinguishing
current vs. long-term classifications to assess solvency and capital structure.
Financial Management in Healthcare Organizations Page 1
,NR 533 | Week 7 Business Plan Assignment Chamberlain College of Nursing | 2026/2027
*Q3:* Which financial statement reports a healthcare organization's revenues, expenses, and net income
over a specific period of time?
A. Balance sheet
B. Statement of cash flows
C. Income statement (statement of operations) [CORRECT]
D. Statement of changes in net assets
Correct Answer: C
Rationale: The income statement, also called the statement of operations (C), reports revenues, expenses, and net
income over a period (e.g., fiscal year). The balance sheet (A) is a snapshot at a point in time showing assets,
liabilities, and net assets. The statement of cash flows (B) tracks cash movements. Statement of changes in net
assets (D) shows equity changes. NR 533 emphasizes the income statement as the primary measure of operational
profitability used in business plan projections.
*Q4:* A clinic's statement of cash flows shows negative cash flow from operating activities for three
consecutive quarters despite reporting positive net income on the income statement. What is the most
likely explanation?
A. The clinic is improperly recognizing revenue
B. The clinic has high non-cash expenses and is collecting accounts receivable slowly [CORRECT]
C. The clinic has too much long-term debt
D. The clinic is over-investing in capital equipment
Correct Answer: B
Rationale: A common scenario in healthcare finance is positive accrual net income combined with negative
operating cash flow, driven by slow accounts receivable collection and large non-cash expenses like depreciation (B).
This signals a liquidity crisis even when profitability looks healthy. Option A assumes fraud without evidence; C and
D affect financing/investing activities, not operating cash flow. NR 533 stresses that cash flow, not net income,
determines organizational survival and is central to business plan feasibility analysis.
*Q5:* A surgical unit's costs include RN salaries, surgical supplies, and equipment depreciation. Which cost
classification correctly groups these as fixed, variable, and semi-variable (mixed)?
A. Salaries = variable; supplies = fixed; depreciation = semi-variable
B. Salaries = fixed (within relevant range); supplies = variable; depreciation = fixed [CORRECT]
C. Salaries = semi-variable; supplies = semi-variable; depreciation = variable
D. All three are variable costs because they change with volume
Correct Answer: B
Rationale: Within a relevant range, RN salaries are typically fixed (staffing is committed regardless of daily volume),
surgical supplies vary directly with case volume (variable), and depreciation is a fixed non-cash expense tied to the
asset's useful life (B). Calling salaries variable (A) confuses committed labor with per-diem staffing; (C) misclassifies
all three. NR 533 cost classification principles are essential for break-even analysis and flexible budgeting in business
plans.
Financial Management in Healthcare Organizations Page 2
, NR 533 | Week 7 Business Plan Assignment Chamberlain College of Nursing | 2026/2027
*Q6:* In a hospital cost accounting system, the salary of the Chief Nursing Officer (CNO) is best classified as:
A. A direct cost of the medical-surgical unit
B. A direct cost of the operating room
C. An indirect cost allocated across multiple cost centers [CORRECT]
D. A variable cost of patient care
Correct Answer: C
Rationale: The CNO's salary benefits multiple departments and cannot be traced to a single cost center, so it is an
indirect cost allocated via a cost-allocation methodology such as square footage, FTEs, or relative value units (C).
Direct costs (A and B) are traceable to a specific department. The CNO salary is also a fixed, not variable, cost (D). NR
533 cost allocation principles govern how overhead is distributed for accurate service-line costing and business plan
pro formas.
*Q7:* A hospital has current assets of $4,500,000 and current liabilities of $2,500,000. What is the current
ratio, and what does it indicate about liquidity?
A. 0.56 — the hospital has insufficient liquidity to cover short-term obligations
B. 1.8 — the hospital has $1.80 in current assets for every $1 of current liabilities, indicating adequate liquidity
[CORRECT]
C. 2.5 — the hospital is highly liquid and likely over-capitalized
D. 4.5 — the hospital can cover current liabilities five times over
Correct Answer: B
Rationale: Current ratio = current assets / current liabilities = $4,500,000 / $2,500,000 = 1.8 (B). A ratio between 1.5
and 2.0 is generally considered healthy for healthcare organizations. Option A inverts the formula; C and D use
wrong numerators. The NR 533 liquidity ratio module uses current ratio to assess short-term solvency, a critical
metric in business plan financial projections.
*Q8:* A healthcare system reports total liabilities of $12,000,000 and total equity (net assets) of
$8,000,000. Calculate the debt-to-equity ratio and interpret its meaning.
A. 0.67 — conservative capital structure with low leverage
B. 1.5 — the organization finances $1.50 of debt for every $1 of equity, indicating moderate-to-high leverage
[CORRECT]
C. 2.5 — extremely high leverage signaling financial distress
D. 0.40 — minimal debt usage
Correct Answer: B
Rationale: Debt-to-equity = total liabilities / total equity = $12,000,000 / $8,000,000 = 1.5 (B). A ratio above 1.0
means the organization relies more on debt than equity financing, which increases financial risk but may amplify
returns. Option A inverts the ratio; C and D use incorrect figures. NR 533 solvency analysis uses debt-to-equity to
evaluate long-term financial stability and capital structure decisions in business plans.
Financial Management in Healthcare Organizations Page 3
