HCAD760 Module 1 Exam Questions with Complete Solutions Graded A+

Accounting - Answer: measurement in financial (dollar) terms of events that reflect the resources, operations, and financing of an organization Financial Management - Answer: provides the theory, concepts, and tools necessary to help managers make better financial decisions Characteristics of a business - Answer: • Obtains financing from marketplace • Uses funds to buy assets • Operates the assets to provide goods or services Sells the goods or services to create revenue 4 Cs of finance - Answer: 1) Cost minimization 2) Cash sufficiency 3) Capital access 4) Control of financial resources Proprietorship - Answer: business owned by a single individual Partnership - Answer: a business owned by two or more people Corporation - Answer: Legal business directly separate from owners or management. Advantages of Proprietorship & Partnership - Answer: ease of formation, few regulations, no corp. income taxes Disadvantages of Proprietorship & Partnership - Answer: limited life, difficult to transfer ownership, unlimited liability Advantages & Disadvantages of Corporations - Answer: Advantages: unlimited life, easy transfer of ownership, limited liability, ease of raising capital Disadvantages: Cost of formation and reporting, double taxation for investor-owned corporations Hybrid forms of Organization - Answer: Limited liability partnership, limited liability corporation Investor Owned Corporations - Answer: investors become owners by purchasing shares of stock. Stockholders have-right of control, claim on residual earnings & residual liquidation proceeds. Expect return on investment Pay Property, income & sales taxes Managers concerned with satisfying stockholders Not-for-Profit corporations - Answer: Meets certain qualifications to be tax-exempt , or 501(C)(3) or (c)(4). Mission statement with terms of service to the community. No shareholders, exempt from property, income & sales tax Managers must satisfy all stakeholders Financial Goal for not-for profit organizations - Answer: ensure financial viability of the org. financial goal of for-profit corporations - Answer: shareholder wealth (stock price) maximization Patient Protection and Affordable Care Act (PPACA) - Answer: 2010 federal legislation designed for comprehensive health reform, with an intent to expand coverage, control health care costs, and improve the health care delivery system. Most significant HC legislation since Medicare/Medicaid. ACA Provisions - Answer: Access to health care insurance, Medicaid expansion, banning of preexisting condition limitations, extended coverage for young adults, requires coverage of 10 essential health benefits, free preventative care, value-based payments Value-Based reimbursement - Answer: Reimbursement that ties tot he quality of care provided. (Population health, clinical integration, data analytics, industry consolidation) Insurance Concepts - Answer: Pooling of losses, Payment only for random losses, risk transfer, indemnification