LSUS MHA 706 – Healthcare Finance Exam Study Guide –
Complete Exam with Actual Questions, Verified Correct Answers
and Explanations | Latest Update 2026/2027.
Question 1
Which financial statement provides information about an organization's
assets, liabilities, and net assets at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet (Statement of Financial Position)
D. Operating Budget
Correct Answer: C. Balance Sheet (Statement of Financial Position)
Explanation: The balance sheet presents the organization's financial position
on a specific date by listing assets, liabilities, and net assets (equity).
Question 2
Which accounting equation must always remain balanced?
A. Revenue = Expenses
B. Assets = Revenue + Expenses
C. Assets = Liabilities + Net Assets (Equity)
D. Cash = Revenue − Expenses
Correct Answer: C. Assets = Liabilities + Net Assets (Equity)
Explanation: The accounting equation is the foundation of financial
accounting and reflects that all organizational resources are financed through
debt or equity.
1|Page
,Question 3
Which financial statement measures profitability over a specific accounting
period?
A. Balance Sheet
B. Income Statement
C. Statement of Changes in Equity
D. Trial Balance
Correct Answer: B. Income Statement
Explanation: The income statement summarizes revenues, expenses, gains,
losses, and net income during a defined period.
Question 4
A hospital purchases a new MRI machine expected to provide benefits for 10
years. This purchase is classified as:
A. Operating expense
B. Capital expenditure
C. Variable expense
D. Current liability
Correct Answer: B. Capital expenditure
Explanation: Capital expenditures involve acquiring long-term assets that
provide benefits over multiple accounting periods.
2|Page
,Question 5
Depreciation primarily represents:
A. Cash paid to creditors
B. Allocation of a long-term asset's cost over its useful life
C. Annual equipment maintenance costs
D. Interest expense
Correct Answer: B. Allocation of a long-term asset's cost over its useful
life
Explanation: Depreciation spreads the cost of a fixed asset across its
estimated useful life rather than expensing the entire cost immediately.
Question 6
Which cost remains unchanged regardless of patient volume within the
relevant range?
A. Medical supplies
B. Laboratory reagents
C. Fixed cost
D. Medication expense
Correct Answer: C. Fixed cost
Explanation: Fixed costs such as rent, insurance, and salaried administration
generally remain constant despite changes in service volume.
Question 7
3|Page
, Which of the following is an example of a variable cost?
A. Hospital building depreciation
B. Property insurance
C. Disposable surgical supplies
D. Executive salaries
Correct Answer: C. Disposable surgical supplies
Explanation: Variable costs change directly with the number of patients or
procedures performed.
Question 8
Contribution margin equals:
A. Revenue minus variable costs
B. Revenue minus fixed costs
C. Assets minus liabilities
D. Net income plus depreciation
Correct Answer: A. Revenue minus variable costs
Explanation: Contribution margin indicates how much revenue remains after
covering variable costs to contribute toward fixed costs and profit.
Question 9
Break-even analysis determines:
A. Maximum hospital capacity
4|Page
Complete Exam with Actual Questions, Verified Correct Answers
and Explanations | Latest Update 2026/2027.
Question 1
Which financial statement provides information about an organization's
assets, liabilities, and net assets at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet (Statement of Financial Position)
D. Operating Budget
Correct Answer: C. Balance Sheet (Statement of Financial Position)
Explanation: The balance sheet presents the organization's financial position
on a specific date by listing assets, liabilities, and net assets (equity).
Question 2
Which accounting equation must always remain balanced?
A. Revenue = Expenses
B. Assets = Revenue + Expenses
C. Assets = Liabilities + Net Assets (Equity)
D. Cash = Revenue − Expenses
Correct Answer: C. Assets = Liabilities + Net Assets (Equity)
Explanation: The accounting equation is the foundation of financial
accounting and reflects that all organizational resources are financed through
debt or equity.
1|Page
,Question 3
Which financial statement measures profitability over a specific accounting
period?
A. Balance Sheet
B. Income Statement
C. Statement of Changes in Equity
D. Trial Balance
Correct Answer: B. Income Statement
Explanation: The income statement summarizes revenues, expenses, gains,
losses, and net income during a defined period.
Question 4
A hospital purchases a new MRI machine expected to provide benefits for 10
years. This purchase is classified as:
A. Operating expense
B. Capital expenditure
C. Variable expense
D. Current liability
Correct Answer: B. Capital expenditure
Explanation: Capital expenditures involve acquiring long-term assets that
provide benefits over multiple accounting periods.
2|Page
,Question 5
Depreciation primarily represents:
A. Cash paid to creditors
B. Allocation of a long-term asset's cost over its useful life
C. Annual equipment maintenance costs
D. Interest expense
Correct Answer: B. Allocation of a long-term asset's cost over its useful
life
Explanation: Depreciation spreads the cost of a fixed asset across its
estimated useful life rather than expensing the entire cost immediately.
Question 6
Which cost remains unchanged regardless of patient volume within the
relevant range?
A. Medical supplies
B. Laboratory reagents
C. Fixed cost
D. Medication expense
Correct Answer: C. Fixed cost
Explanation: Fixed costs such as rent, insurance, and salaried administration
generally remain constant despite changes in service volume.
Question 7
3|Page
, Which of the following is an example of a variable cost?
A. Hospital building depreciation
B. Property insurance
C. Disposable surgical supplies
D. Executive salaries
Correct Answer: C. Disposable surgical supplies
Explanation: Variable costs change directly with the number of patients or
procedures performed.
Question 8
Contribution margin equals:
A. Revenue minus variable costs
B. Revenue minus fixed costs
C. Assets minus liabilities
D. Net income plus depreciation
Correct Answer: A. Revenue minus variable costs
Explanation: Contribution margin indicates how much revenue remains after
covering variable costs to contribute toward fixed costs and profit.
Question 9
Break-even analysis determines:
A. Maximum hospital capacity
4|Page
