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FACHE ACHE BOG FINAL EXAM 2 VERSIONS 2025/2026
COMPLETE TEST BANK WITH VERIFIED QUESTIONS &
ANSWERS | FREQUENTLY TESTED STUDY GUIDE FOR
GUARANTEED PASS || AWARDED A+||
The purpose of the ACHE Ethics Committee is to review and recommend
action on ethical violations to which group?
a. Executive Committee.
b. Board of Governors.
c. Council of Regents.
d. Membership Committee. - ANSWER-b. Board of Governors.
According to the ACHE Code of Ethics, what action can the Ethics
Committee take against an affiliate after a grievance procedure has been
initiated?
a. Fine the affiliate.
b. Report the violation to the affiliate's employer.
c. Issue a written reprimand to the affiliate.
d. Recommend expulsion of the affiliate. - ANSWER-d. Recommend
expulsion of the affiliate.
ACHE's Ethical Policy Statement on Ethical Issues Related to Downsizing
recommends that healthcare executives should consider providing which of
the following when downsizing?
a. Financial aid.
b. Child care.
c. Family counseling
d. Out-placement assistance. - ANSWER-d. Out-placement assistance.
According to the ACHE's Ethical Policy Statement in Creating an Ethical
Environment for Employees, the organization should:
a. Ensure maximum utilization of an employee's skills and abilities.
b. Create a working environment that provides freedom from coercion.
c. Develop a committee that addresses employee diversity and compliance.
2025/2026
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d. Provide sensitivity training to new employees at orientation. - ANSWER-
b. Create a working environment that provides freedom from coercion.
What are the three basic categories of quantitative performance measures
used in conventional accounting systems?
a. Market share, customer satisfaction, and quality.
b. Demand, sales, and cost.
c. Demand, cost, and output/productivity.
d. Services rendered, market share, and access. - ANSWER-c. Demand,
cost, and output/productivity.
Under a capitated payment system, the risk sharing arrangements involve
which parties?
a. Insurers and patients.
b. Physicians and purchasers.
c. Hospitals and patients.
d. Hospitals and insurers. - ANSWER-d. Hospitals and insurers.
Which concept of profitability analysis listed below is correct?
a. Internal Rate of Return (IRR) measures a project's percentage of cash
flow.
b. Net Present Value (NPV) is a profitability measure that uses discounted
cash flow.
c. Modified Internal Rate of Return (MIRR) is a less accurate measure than
a project's actual rate of return.
d. Profitability Return Rate (PRR) provides the most accurate measure. -
ANSWER-b. Net Present Value (NPV) is a profitability measure that uses
discounted cash flow.
Which of the following must be included when determining a capital
project's incremental cash flow?
a. Opportunity costs.
b. Cash inflows.
c. Inflation.
d. Internal rate of return. - ANSWER-a. Opportunity costs.
The critical link that brings patients and providers together is:
a. Marketing.
b. Advertising.
c. Strategic planning.
2025/2026
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d. External analysis. - ANSWER-a. Marketing.
The concept of demand management consists of:
a. Concurrent review.
b. Risk assessment.
c. Disease management.
d. Chart review. - ANSWER-a. Concurrent review.
The primary purpose of generally accepted accounting principles (GAA) in
healthcare settings is to:
a. Provide regulators with increased access to high quality financial
statements of organizations within their jurisdiction.
b. Ensure that financial information that is reported to outsiders is
consistent across businesses and presented in a manner that facilitates
interpretation and judgments.
c. Allow interested individuals a rapid means of collecting financial data
about hospitals and managed care organizations.
d. Facilitate the training of accountants and other finance professionals in
the fundamentals of hospital and health services accounting. - ANSWER-b.
Ensure that financial information that is reported to outsiders is consistent
across businesses and presented in a manner that facilitates interpretation
and judgments.
The internal rate of return measures the:
a. Number of years to recover the original investment.
b. Discounted future cash flows.
c. Discount rate at which the net present value is zero.
d. Discount rate that the firm uses in computing the cost of capital. -
ANSWER-c. The discount rate at which the net present value is zero.
The Statement of Cash Flows is typically organized into three sections:
Cash Flow From Operations; Cash Flow From Investing Activities; and
Cash Flow From:
a. Bad Debt Recovery.
b. Regulatory Recapture.
c. Financing Activities.
d. Donations & Foundation Support. - ANSWER-c. Financing Activities.
Which of the following combines data from a balance sheet and an income
statement to create a single number that facilitates easy interpretation?
2025/2026
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a. Financial ratio analysis.
b. Acid test ratio.
c. Operating margin ratio.
d. Cash flow analysis. - ANSWER-a. Financial ratio analysis.
In a healthcare organization, who has ultimate fiduciary responsibility?
a. Chief financial officer
b. Board of directors.
c. Medical staff officers.
d. Senior management. - ANSWER-b. Board of directors.
Medicare DRG payment is highly dependent upon a hospital's case mix
index. This index represents the average relative weight for all Medicare
patients treated in a:
a. Specific nursing unit or specialty area.
b. Specific period.
c. Common geographic market.
d. Specific facility. - ANSWER-b. Specific period.
If a CEO wanted to look at a "snapshot" of the financial condition of the
healthcare organization, he/she would review which of the following?
a. Income Statement.
b. Balance Sheet.
c. Retained Earnings Statement.
d. Investment Portfolio. - ANSWER-b. Balance Sheet.
Where should charity care be shown in a healthcare organization's
financial statement?
a. In the balance sheet.
b. In the statement of operations.
c. In the statement of changes in net assets.
d. In the notes to the financial statements. - ANSWER-d. In the notes to the
financial statements.
Which of the following is the best way to assign costs in responsibility
management?
a. Allow each department manager to be responsible for a different type of
fixed cost.
b. Allow each department manager to choose the cost that he/she prefers
to control.
2025/2026
FACHE ACHE BOG FINAL EXAM 2 VERSIONS 2025/2026
COMPLETE TEST BANK WITH VERIFIED QUESTIONS &
ANSWERS | FREQUENTLY TESTED STUDY GUIDE FOR
GUARANTEED PASS || AWARDED A+||
The purpose of the ACHE Ethics Committee is to review and recommend
action on ethical violations to which group?
a. Executive Committee.
b. Board of Governors.
c. Council of Regents.
d. Membership Committee. - ANSWER-b. Board of Governors.
According to the ACHE Code of Ethics, what action can the Ethics
Committee take against an affiliate after a grievance procedure has been
initiated?
a. Fine the affiliate.
b. Report the violation to the affiliate's employer.
c. Issue a written reprimand to the affiliate.
d. Recommend expulsion of the affiliate. - ANSWER-d. Recommend
expulsion of the affiliate.
ACHE's Ethical Policy Statement on Ethical Issues Related to Downsizing
recommends that healthcare executives should consider providing which of
the following when downsizing?
a. Financial aid.
b. Child care.
c. Family counseling
d. Out-placement assistance. - ANSWER-d. Out-placement assistance.
According to the ACHE's Ethical Policy Statement in Creating an Ethical
Environment for Employees, the organization should:
a. Ensure maximum utilization of an employee's skills and abilities.
b. Create a working environment that provides freedom from coercion.
c. Develop a committee that addresses employee diversity and compliance.
2025/2026
,2|Page
d. Provide sensitivity training to new employees at orientation. - ANSWER-
b. Create a working environment that provides freedom from coercion.
What are the three basic categories of quantitative performance measures
used in conventional accounting systems?
a. Market share, customer satisfaction, and quality.
b. Demand, sales, and cost.
c. Demand, cost, and output/productivity.
d. Services rendered, market share, and access. - ANSWER-c. Demand,
cost, and output/productivity.
Under a capitated payment system, the risk sharing arrangements involve
which parties?
a. Insurers and patients.
b. Physicians and purchasers.
c. Hospitals and patients.
d. Hospitals and insurers. - ANSWER-d. Hospitals and insurers.
Which concept of profitability analysis listed below is correct?
a. Internal Rate of Return (IRR) measures a project's percentage of cash
flow.
b. Net Present Value (NPV) is a profitability measure that uses discounted
cash flow.
c. Modified Internal Rate of Return (MIRR) is a less accurate measure than
a project's actual rate of return.
d. Profitability Return Rate (PRR) provides the most accurate measure. -
ANSWER-b. Net Present Value (NPV) is a profitability measure that uses
discounted cash flow.
Which of the following must be included when determining a capital
project's incremental cash flow?
a. Opportunity costs.
b. Cash inflows.
c. Inflation.
d. Internal rate of return. - ANSWER-a. Opportunity costs.
The critical link that brings patients and providers together is:
a. Marketing.
b. Advertising.
c. Strategic planning.
2025/2026
,3|Page
d. External analysis. - ANSWER-a. Marketing.
The concept of demand management consists of:
a. Concurrent review.
b. Risk assessment.
c. Disease management.
d. Chart review. - ANSWER-a. Concurrent review.
The primary purpose of generally accepted accounting principles (GAA) in
healthcare settings is to:
a. Provide regulators with increased access to high quality financial
statements of organizations within their jurisdiction.
b. Ensure that financial information that is reported to outsiders is
consistent across businesses and presented in a manner that facilitates
interpretation and judgments.
c. Allow interested individuals a rapid means of collecting financial data
about hospitals and managed care organizations.
d. Facilitate the training of accountants and other finance professionals in
the fundamentals of hospital and health services accounting. - ANSWER-b.
Ensure that financial information that is reported to outsiders is consistent
across businesses and presented in a manner that facilitates interpretation
and judgments.
The internal rate of return measures the:
a. Number of years to recover the original investment.
b. Discounted future cash flows.
c. Discount rate at which the net present value is zero.
d. Discount rate that the firm uses in computing the cost of capital. -
ANSWER-c. The discount rate at which the net present value is zero.
The Statement of Cash Flows is typically organized into three sections:
Cash Flow From Operations; Cash Flow From Investing Activities; and
Cash Flow From:
a. Bad Debt Recovery.
b. Regulatory Recapture.
c. Financing Activities.
d. Donations & Foundation Support. - ANSWER-c. Financing Activities.
Which of the following combines data from a balance sheet and an income
statement to create a single number that facilitates easy interpretation?
2025/2026
, 4|Page
a. Financial ratio analysis.
b. Acid test ratio.
c. Operating margin ratio.
d. Cash flow analysis. - ANSWER-a. Financial ratio analysis.
In a healthcare organization, who has ultimate fiduciary responsibility?
a. Chief financial officer
b. Board of directors.
c. Medical staff officers.
d. Senior management. - ANSWER-b. Board of directors.
Medicare DRG payment is highly dependent upon a hospital's case mix
index. This index represents the average relative weight for all Medicare
patients treated in a:
a. Specific nursing unit or specialty area.
b. Specific period.
c. Common geographic market.
d. Specific facility. - ANSWER-b. Specific period.
If a CEO wanted to look at a "snapshot" of the financial condition of the
healthcare organization, he/she would review which of the following?
a. Income Statement.
b. Balance Sheet.
c. Retained Earnings Statement.
d. Investment Portfolio. - ANSWER-b. Balance Sheet.
Where should charity care be shown in a healthcare organization's
financial statement?
a. In the balance sheet.
b. In the statement of operations.
c. In the statement of changes in net assets.
d. In the notes to the financial statements. - ANSWER-d. In the notes to the
financial statements.
Which of the following is the best way to assign costs in responsibility
management?
a. Allow each department manager to be responsible for a different type of
fixed cost.
b. Allow each department manager to choose the cost that he/she prefers
to control.
2025/2026
