FINANCIAL MANAGEMENT- TEST
QUESTIONS AND ANSWERS Graded
A+
An _________ covers how the day-to-day operating expenses, ie. labor and
supplies, and revenue will occur; a n _________ covers expensive equipment
whose usefulness will last over many years. - Correct answer-Operating budget;
capital budget.
Healthcare organizations use cost accounting and document costs because their
insurers expect accurate, honest, and complete records of every dollar of
cost. - Correct answer-True.
An operating budget is one type of budget. This is the budget used to
plan/anticipate the unit's day-to-day expenses and revenues. The operating
budget is a written plan -much like a plan of care for a patient- that tries to
project/anticipate operating expenses and revenues. - Correct answer-Operating
expenses are estimated by collecting data, especially data on patient volume,
patient acuity, and required staffing and supply levels for providing care. Once the
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, data is collected, the nurse manager can estimate the next year's expenses by:
looking at last year's costs, adjusting for inflation, then adjusting for any increases
likely in patient census and subsequently, nursing staff.
Understanding financial statements helps nurse managers know if the
organization's income is enough to cover its expenses and losses. - Correct answer-
True. Yes, the ability to read financial statements helps us know if the organization
is healthy.
Unlike variable costs, such as fuel costs for an airline, fixed costs are the same
regardless of volume. Similarly, fixed staff are those present regardless of patient
volume. In light of these facts, _________ are examples of fixed staff and
___________are examples of variable staff. - Correct answer-Nurse managers;
direct care nurses. This is correct. Nurse managers are an example of fixed staff
because their presence or numbers does not depend on patient volume or acuity.
The number of direct care nurses, however, would depend on patient volume.
It is not important to track costs to stay "solvent" or financially healthy. - Correct
answer-False: Actually tracking costs is very important to staying solvent or
financially healthy. This is especially true in healthcare where the difference
between revenues and losses is often razor thin.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
QUESTIONS AND ANSWERS Graded
A+
An _________ covers how the day-to-day operating expenses, ie. labor and
supplies, and revenue will occur; a n _________ covers expensive equipment
whose usefulness will last over many years. - Correct answer-Operating budget;
capital budget.
Healthcare organizations use cost accounting and document costs because their
insurers expect accurate, honest, and complete records of every dollar of
cost. - Correct answer-True.
An operating budget is one type of budget. This is the budget used to
plan/anticipate the unit's day-to-day expenses and revenues. The operating
budget is a written plan -much like a plan of care for a patient- that tries to
project/anticipate operating expenses and revenues. - Correct answer-Operating
expenses are estimated by collecting data, especially data on patient volume,
patient acuity, and required staffing and supply levels for providing care. Once the
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, data is collected, the nurse manager can estimate the next year's expenses by:
looking at last year's costs, adjusting for inflation, then adjusting for any increases
likely in patient census and subsequently, nursing staff.
Understanding financial statements helps nurse managers know if the
organization's income is enough to cover its expenses and losses. - Correct answer-
True. Yes, the ability to read financial statements helps us know if the organization
is healthy.
Unlike variable costs, such as fuel costs for an airline, fixed costs are the same
regardless of volume. Similarly, fixed staff are those present regardless of patient
volume. In light of these facts, _________ are examples of fixed staff and
___________are examples of variable staff. - Correct answer-Nurse managers;
direct care nurses. This is correct. Nurse managers are an example of fixed staff
because their presence or numbers does not depend on patient volume or acuity.
The number of direct care nurses, however, would depend on patient volume.
It is not important to track costs to stay "solvent" or financially healthy. - Correct
answer-False: Actually tracking costs is very important to staying solvent or
financially healthy. This is especially true in healthcare where the difference
between revenues and losses is often razor thin.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
