MHA 706 Module 1 questions n correct
answers graded A+
Healthcare Finance - correct answer ✔✔is the practice of finance, including both accounting and
financial management, within health services (provider) organizations
Accounting - correct answer ✔✔concerns the measurement, in financial (dollar) terms, of events that
reflect the resources, operations, and financing of an organization
Financial management - correct answer ✔✔provides the theory, concepts, and tools necessary to help
managers make better financial decisions
Business characteristics - correct answer ✔✔-obtains financing from the marketplace
-uses the funds to buy assets
-operates the assets to provide goods or services
-sells the goods or services to create revenue
Pure Charity - correct answer ✔✔refers to an undertaking for a charitable purpose only. The relief of
poverty, advancement of education, advancement of religion, promotion of health, the obtaining of
good government, and the accomplishment of that which is beneficial to the community in any other
respect are pure charities.
Primary role of finance - correct answer ✔✔is to plan for, acquire, and utilize resources to maximize the
efficiency (and hence value) of the enterprise.
The Four C's - correct answer ✔✔cost minimization
cash sufficiency
capital access
control of financial resources
, 3 categories of business organizations - correct answer ✔✔proprietorship, partnership, and corporation
(there are also hybrid forms)
Advantages of Proprietorships and Partnerships - correct answer ✔✔ease of formation, subject to few
regulations, and no corporate income taxes.
Disadvantages to proprietorships and partnerships - correct answer ✔✔limited life, difficult to transfer
ownership, unlimited liability, difficult to raise capital
Advantages to corporations - correct answer ✔✔unlimited life, easy transfer of ownership, ease of
raising capital
Disadvantages of corporations - correct answer ✔✔cost of formation and reporting and double taxation
for investor-owned corporations
Limited liability partnership LLP - correct answer ✔✔◦Partners share general business liability, but
partners are liable only for their own malpractice actions
Limited liability company LLC - correct answer ✔✔Members are taxed like partners
and Liability like stockholders
Professional corporation (PC) or professional association (PA) - correct answer ✔✔Owners have benefits
of incorporation. However, still liable for malpractice. Often used by individual clinicians.
Stakeholders - correct answer ✔✔have a (financial) interest in the business
Investor-owned corporations - correct answer ✔✔stems from their organizational goal: shareholder
wealth maximization
Not for profit - correct answer ✔✔is to ensure the financial viability of the organization
answers graded A+
Healthcare Finance - correct answer ✔✔is the practice of finance, including both accounting and
financial management, within health services (provider) organizations
Accounting - correct answer ✔✔concerns the measurement, in financial (dollar) terms, of events that
reflect the resources, operations, and financing of an organization
Financial management - correct answer ✔✔provides the theory, concepts, and tools necessary to help
managers make better financial decisions
Business characteristics - correct answer ✔✔-obtains financing from the marketplace
-uses the funds to buy assets
-operates the assets to provide goods or services
-sells the goods or services to create revenue
Pure Charity - correct answer ✔✔refers to an undertaking for a charitable purpose only. The relief of
poverty, advancement of education, advancement of religion, promotion of health, the obtaining of
good government, and the accomplishment of that which is beneficial to the community in any other
respect are pure charities.
Primary role of finance - correct answer ✔✔is to plan for, acquire, and utilize resources to maximize the
efficiency (and hence value) of the enterprise.
The Four C's - correct answer ✔✔cost minimization
cash sufficiency
capital access
control of financial resources
, 3 categories of business organizations - correct answer ✔✔proprietorship, partnership, and corporation
(there are also hybrid forms)
Advantages of Proprietorships and Partnerships - correct answer ✔✔ease of formation, subject to few
regulations, and no corporate income taxes.
Disadvantages to proprietorships and partnerships - correct answer ✔✔limited life, difficult to transfer
ownership, unlimited liability, difficult to raise capital
Advantages to corporations - correct answer ✔✔unlimited life, easy transfer of ownership, ease of
raising capital
Disadvantages of corporations - correct answer ✔✔cost of formation and reporting and double taxation
for investor-owned corporations
Limited liability partnership LLP - correct answer ✔✔◦Partners share general business liability, but
partners are liable only for their own malpractice actions
Limited liability company LLC - correct answer ✔✔Members are taxed like partners
and Liability like stockholders
Professional corporation (PC) or professional association (PA) - correct answer ✔✔Owners have benefits
of incorporation. However, still liable for malpractice. Often used by individual clinicians.
Stakeholders - correct answer ✔✔have a (financial) interest in the business
Investor-owned corporations - correct answer ✔✔stems from their organizational goal: shareholder
wealth maximization
Not for profit - correct answer ✔✔is to ensure the financial viability of the organization
