Final Exam- Introduction to Health Care
Finance and Accounting
Monthly budget review is ____. - correct answer ✔✔a way to identify cash flow problems and
embezzlement
A large hospital uses line item control of its budget. Variance analysis shows that one unit is exceeding its
budget for Repairs due to a manufacturing flaw in a commonly used device that is no longer under
warranty. The unit manager can ____. - correct answer ✔✔request a meeting with upper management
to change the budget
Bottom-up budgeting ____. - correct answer ✔✔fails when unit or department managers overstate
operating costs
Variance analysis is most commonly performed on ____. - correct answer ✔✔operating budgets
Which of the following is an allocated cost for a department within a healthcare facility?
a)liability insurance
b)equipment rental
c)continuing education
d)employee pensions - correct answer ✔✔liability insurance
A master operating budget for a hospital is comprised of ____. - correct answer ✔✔all the departmental
or unit budgets
What is the most important advantage of zero-based budgeting over other budgeting philosophies? -
correct answer ✔✔All managers are forced to look for alternatives when preparing their budgets.
What should a business use to predict which periods will have required payments exceeding expected
revenues? - correct answer ✔✔a cash budget
, When a bank statement for the operating checking account of a medical practice does not include a
check to a vendor mailed three weeks earlier, someone at the medical practice should ____. - correct
answer ✔✔contact the vendor and ask about receipt of the check.
When doing a bank reconciliation, which of the following is subtracted from the cash balance from the
accounting records?
a)deposits in transit
b) interest received
c)checks outstanding
d)charge for an NSF check - correct answer ✔✔interest received
Which of the following is the best definition of the accounting term cash drawer?
a)The desk or file cabinet drawer containing the cash lock box
b)The person who designs the various denominations of printed money
c)A drawer containing a mix of bills and coins for receiving cash and making change
d)The employee authorized to withdraw cash from the petty cash lock box - correct answer ✔✔A drawer
containing a mix of bills and coins for receiving cash and making change
A medical practice uses its revenues to purchase a $20,000 certificate of deposit that matures in two
years. The $20,000 CD should be recorded as ____. - correct answer ✔✔a long term investment
The net cash & cash equivalents from an end of fiscal year statement of cash flows should match the
____. - correct answer ✔✔cash & cash equivalents on the balance sheet
The final statement or "bottom line" of an annual statement of cash flows is the end of year ____. -
correct answer ✔✔cash & cash equivalents
When a patient pays for a medical service in cash, the employee in charge of the cash drawer should
____. - correct answer ✔✔give the patient a receipt for the cash payment
A municipal bond can be issued by a ____. - correct answer ✔✔county hospital
Finance and Accounting
Monthly budget review is ____. - correct answer ✔✔a way to identify cash flow problems and
embezzlement
A large hospital uses line item control of its budget. Variance analysis shows that one unit is exceeding its
budget for Repairs due to a manufacturing flaw in a commonly used device that is no longer under
warranty. The unit manager can ____. - correct answer ✔✔request a meeting with upper management
to change the budget
Bottom-up budgeting ____. - correct answer ✔✔fails when unit or department managers overstate
operating costs
Variance analysis is most commonly performed on ____. - correct answer ✔✔operating budgets
Which of the following is an allocated cost for a department within a healthcare facility?
a)liability insurance
b)equipment rental
c)continuing education
d)employee pensions - correct answer ✔✔liability insurance
A master operating budget for a hospital is comprised of ____. - correct answer ✔✔all the departmental
or unit budgets
What is the most important advantage of zero-based budgeting over other budgeting philosophies? -
correct answer ✔✔All managers are forced to look for alternatives when preparing their budgets.
What should a business use to predict which periods will have required payments exceeding expected
revenues? - correct answer ✔✔a cash budget
, When a bank statement for the operating checking account of a medical practice does not include a
check to a vendor mailed three weeks earlier, someone at the medical practice should ____. - correct
answer ✔✔contact the vendor and ask about receipt of the check.
When doing a bank reconciliation, which of the following is subtracted from the cash balance from the
accounting records?
a)deposits in transit
b) interest received
c)checks outstanding
d)charge for an NSF check - correct answer ✔✔interest received
Which of the following is the best definition of the accounting term cash drawer?
a)The desk or file cabinet drawer containing the cash lock box
b)The person who designs the various denominations of printed money
c)A drawer containing a mix of bills and coins for receiving cash and making change
d)The employee authorized to withdraw cash from the petty cash lock box - correct answer ✔✔A drawer
containing a mix of bills and coins for receiving cash and making change
A medical practice uses its revenues to purchase a $20,000 certificate of deposit that matures in two
years. The $20,000 CD should be recorded as ____. - correct answer ✔✔a long term investment
The net cash & cash equivalents from an end of fiscal year statement of cash flows should match the
____. - correct answer ✔✔cash & cash equivalents on the balance sheet
The final statement or "bottom line" of an annual statement of cash flows is the end of year ____. -
correct answer ✔✔cash & cash equivalents
When a patient pays for a medical service in cash, the employee in charge of the cash drawer should
____. - correct answer ✔✔give the patient a receipt for the cash payment
A municipal bond can be issued by a ____. - correct answer ✔✔county hospital
