HSA 464 EXAM 2 QUESTIONS UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. Working capital is defined as the
Answer:
sum of a healthcare organizations investment in current assets
Question:
2. Examples of current assets include
Answer:
inventories and prepaid expenses
Question:
3. Liquidity refers to
Answer:
how quickly an asset can be converted to cash
Question:
4. What are the advantages of having sufficient working capital on hand?
Answer:
organizations are able to pay their employees and vendors on time, thereby maintaining a positive
relationship; organizations have sufficient resources to repay loans and are therefore creditworthy
Question:
5. Where does initial working capital for for-profit healthcare organizations come from?
Answer:
the sale of stock
Question:
6. Permanent working capital is
Answer:
the minimum amount of working capital always on hand
Question:
7. sources of temporary working capital include
Answer:
trade credit; equity; debt
Question:
8. An organization using trade credits to finance temporary working capital is essentially
Answer:
borrowing money from a vendor by delaying payment to the vendor for goods or services already received
, Question:
9. What does the term "5-15, net 30" mean?
Answer:
an organization can receive a 5 % discount if it pays within 15 days
Question:
10. what are cash flows
Answer:
the difference between cash receipts and cash disbursements
Question:
11. why do healthcare organizations keep cash on hand?
Answer:
for the expected demand to pay employees and vendors in cash; for emergencies and unexpected
purchases; for the unexpected demand for cash when a vendor offers a price reduction the organization
does not want to pass up
Question:
12. The average payment period ratio indicates
Answer:
the average amount of time that passes before a current liability is paid
Question:
13. accounts receivable are
Answer:
money due to the organization from patients and third parties for services already rendered
Question:
14. Which of the following factors set the healthcare industry apart from other industries regarding
accounts receivable?
Answer:
the cost of services; the method of payment for services
Question:
15. What is the primary source of data required for reimbursement from third parties?
Answer:
the medical record
Question:
16. An organization incurs carrying costs
Answer:
when it extends credit to patients after providing services
Question:
17. An organization incurs credit-and-collection costs
QUESTIONS AND CORRECT ANSWERS
Question:
1. Working capital is defined as the
Answer:
sum of a healthcare organizations investment in current assets
Question:
2. Examples of current assets include
Answer:
inventories and prepaid expenses
Question:
3. Liquidity refers to
Answer:
how quickly an asset can be converted to cash
Question:
4. What are the advantages of having sufficient working capital on hand?
Answer:
organizations are able to pay their employees and vendors on time, thereby maintaining a positive
relationship; organizations have sufficient resources to repay loans and are therefore creditworthy
Question:
5. Where does initial working capital for for-profit healthcare organizations come from?
Answer:
the sale of stock
Question:
6. Permanent working capital is
Answer:
the minimum amount of working capital always on hand
Question:
7. sources of temporary working capital include
Answer:
trade credit; equity; debt
Question:
8. An organization using trade credits to finance temporary working capital is essentially
Answer:
borrowing money from a vendor by delaying payment to the vendor for goods or services already received
, Question:
9. What does the term "5-15, net 30" mean?
Answer:
an organization can receive a 5 % discount if it pays within 15 days
Question:
10. what are cash flows
Answer:
the difference between cash receipts and cash disbursements
Question:
11. why do healthcare organizations keep cash on hand?
Answer:
for the expected demand to pay employees and vendors in cash; for emergencies and unexpected
purchases; for the unexpected demand for cash when a vendor offers a price reduction the organization
does not want to pass up
Question:
12. The average payment period ratio indicates
Answer:
the average amount of time that passes before a current liability is paid
Question:
13. accounts receivable are
Answer:
money due to the organization from patients and third parties for services already rendered
Question:
14. Which of the following factors set the healthcare industry apart from other industries regarding
accounts receivable?
Answer:
the cost of services; the method of payment for services
Question:
15. What is the primary source of data required for reimbursement from third parties?
Answer:
the medical record
Question:
16. An organization incurs carrying costs
Answer:
when it extends credit to patients after providing services
Question:
17. An organization incurs credit-and-collection costs
