NAB Study Guide Questions and verified
answers.
Education and training programs. ANS - To obtain more accurate cost estimates and more control over
costs (participatory budget making process - others are more likely to consider the budget legitimate).
A change in which one of the following is not likely to be the cause of a budget variance? ANS - The
personal needs allowance.
"Assets are always equal to the sum of liabilities plus owners' equity" is the basic concept in the
organization of the: ANS - Balance Sheet.
The financial success or failure of a nursing facility is usually measured by its: ANS - Return on Equity
(net income - i.e., revenues in excess of expenses) and divides it by owners' equity).
If a facility has a current ratio greater than 1, which of the following statements is most likely to be true?
ANS - It will be able to pay its bills on time (current ratio greater than 1 means that the organization's
current assets exceed its current liabilities, and this indicates a good ability to pay short-term liabilities
as they come in).
A check should generally be issued only when which one of the following is available and properly
signed? ANS - Purchase Order.
The importance of matching revenue with the expenses incurred in generating those revenues is the
reason for recording which one of the following? ANS - Depreciation (the purpose of recognizing
depreciation is to satisfy the Matching Principle (GAAP) stated in this question).
Using the straight-line method, what would be the annual depreciation expense for a piece of
equipment having a cost of $6,000.00, a manufacturer's warranty for 2 years, and an estimated useful
life of 6 years? ANS - $1,000.
Which of the following is a current asset? ANS - Accounts Receivables.
, Under the accrual basis of accounting, revenues are recorded when _______ and expenses are recorded
when ______________. ANS - Revenues are earned - expenses are incurred.
A generally accepted accounting principle (GAAP) would be violated if a company: ANS - Used in its
balance sheet an optimistic estimate of the current market value of its building (the use of current
market value rather than historical costs would not be consistent with the Objectivity GAAP, and the use
of an optimistic rather than conservative estimate would violate the Conservatism GAAP).
Last year's food costs for a 100-bed facility were $146,820. The facility had an average occupancy rate of
85% that year. What was this facility's food cost per patient day (PPD)? ANS - $4.73
The Medicare benefit period ends when a beneficiary ANS - Has had 60 straight days with neither any
hospital days nor SNF days
Medicare Part A coverage of skilled nursing facility (SNF) care entails out-of-pocket payment by the
patient of a daily amount for which days of SNF care in a benefit period? ANS - 21st through 100th
Which of the following statements is NOT true regarding the Medicare Prospective Payment System for
Skilled Nursing Facilities? ANS - There are separate prospective rates for capital-related costs (Medicare
does not make separate reimbursement to SNFs for capital-related costs. The RUG rate that the facility
receives is expected to cover all types of costs).
A RUG is a: ANS - Category in a resident classification system.
Completion of the Medicare cost report requires carrying out all except which one of the following
tasks? ANS - Aging of accounts receivable.
The term for unintentional improper or excessive use of benefits of a health insurance program is: ANS -
Abuse.
The process by which an individual becomes eligible for Medicaid by incurring medical expenses until
personal resources fall below a specified ceiling is called: ANS - Spend Down
answers.
Education and training programs. ANS - To obtain more accurate cost estimates and more control over
costs (participatory budget making process - others are more likely to consider the budget legitimate).
A change in which one of the following is not likely to be the cause of a budget variance? ANS - The
personal needs allowance.
"Assets are always equal to the sum of liabilities plus owners' equity" is the basic concept in the
organization of the: ANS - Balance Sheet.
The financial success or failure of a nursing facility is usually measured by its: ANS - Return on Equity
(net income - i.e., revenues in excess of expenses) and divides it by owners' equity).
If a facility has a current ratio greater than 1, which of the following statements is most likely to be true?
ANS - It will be able to pay its bills on time (current ratio greater than 1 means that the organization's
current assets exceed its current liabilities, and this indicates a good ability to pay short-term liabilities
as they come in).
A check should generally be issued only when which one of the following is available and properly
signed? ANS - Purchase Order.
The importance of matching revenue with the expenses incurred in generating those revenues is the
reason for recording which one of the following? ANS - Depreciation (the purpose of recognizing
depreciation is to satisfy the Matching Principle (GAAP) stated in this question).
Using the straight-line method, what would be the annual depreciation expense for a piece of
equipment having a cost of $6,000.00, a manufacturer's warranty for 2 years, and an estimated useful
life of 6 years? ANS - $1,000.
Which of the following is a current asset? ANS - Accounts Receivables.
, Under the accrual basis of accounting, revenues are recorded when _______ and expenses are recorded
when ______________. ANS - Revenues are earned - expenses are incurred.
A generally accepted accounting principle (GAAP) would be violated if a company: ANS - Used in its
balance sheet an optimistic estimate of the current market value of its building (the use of current
market value rather than historical costs would not be consistent with the Objectivity GAAP, and the use
of an optimistic rather than conservative estimate would violate the Conservatism GAAP).
Last year's food costs for a 100-bed facility were $146,820. The facility had an average occupancy rate of
85% that year. What was this facility's food cost per patient day (PPD)? ANS - $4.73
The Medicare benefit period ends when a beneficiary ANS - Has had 60 straight days with neither any
hospital days nor SNF days
Medicare Part A coverage of skilled nursing facility (SNF) care entails out-of-pocket payment by the
patient of a daily amount for which days of SNF care in a benefit period? ANS - 21st through 100th
Which of the following statements is NOT true regarding the Medicare Prospective Payment System for
Skilled Nursing Facilities? ANS - There are separate prospective rates for capital-related costs (Medicare
does not make separate reimbursement to SNFs for capital-related costs. The RUG rate that the facility
receives is expected to cover all types of costs).
A RUG is a: ANS - Category in a resident classification system.
Completion of the Medicare cost report requires carrying out all except which one of the following
tasks? ANS - Aging of accounts receivable.
The term for unintentional improper or excessive use of benefits of a health insurance program is: ANS -
Abuse.
The process by which an individual becomes eligible for Medicaid by incurring medical expenses until
personal resources fall below a specified ceiling is called: ANS - Spend Down
