Solution to NAB Study Guide Questions

Solution to NAB Study Guide
Questions




Education and training programs. - ANS-To obtain more
accurate cost estimates and more control over costs
(participatory budget making process - others are more likely to
consider the budget legitimate).


A change in which one of the following is not likely to be the
cause of a budget variance? - ANS-The personal needs
allowance.


"Assets are always equal to the sum of liabilities plus owners'
equity" is the basic concept in the organization of the: - ANS-
Balance Sheet.

,The financial success or failure of a nursing facility is usually
measured by its: - ANS-Return on Equity (net income - i.e.,
revenues in excess of expenses) and divides it by owners'
equity).


If a facility has a current ratio greater than 1, which of the
following statements is most likely to be true? - ANS-It will be
able to pay its bills on time (current ratio greater than 1 means
that the organization's current assets exceed its current
liabilities, and this indicates a good ability to pay short-term
liabilities as they come in).


A check should generally be issued only when which one of the
following is available and properly signed? - ANS-Purchase
Order.


The importance of matching revenue with the expenses
incurred in generating those revenues is the reason for
recording which one of the following? - ANS-Depreciation (the
purpose of recognizing depreciation is to satisfy the Matching
Principle (GAAP) stated in this question).

, Using the straight-line method, what would be the annual
l.. l.. l.. l.. l.. l.. l.. l.. l..




depreciation expense for a piece of equipment having a cost of l.. l.. l.. l.. l.. l.. l.. l.. l.. l.. l..




$6,000.00, a manufacturer's warranty for 2 years, and an l.. l.. l.. l.. l.. l.. l.. l.. l..




estimated useful life of 6 years? - ANS-$1,000. l.. l.. l.. l.. l.. l.. l..




Which of the following is a current asset? - ANS-Accounts
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Receivables.


Under the accrual basis of accounting, revenues are recorded
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when _______ and expenses are recorded when
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______________. - ANS-Revenues are earned - expenses are l.. l.. l.. l.. l.. l.. l.. l..




incurred.


A generally accepted accounting principle (GAAP) would be
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violated if a company: - ANS-Used in its balance sheet an
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optimistic estimate of the current market value of its building (the l.. l.. l.. l.. l.. l.. l.. l.. l.. l.. l..




use of current market value rather than historical costs would not
l.. l.. l.. l.. l.. l.. l.. l.. l.. l.. l..




be consistent with the Objectivity GAAP, and the use of an
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optimistic rather than conservative estimate would violate the l.. l.. l.. l.. l.. l.. l.. l..




Conservatism GAAP). l..




Last year's food costs for a 100-bed facility were $146,820. The
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facility had an average occupancy rate of 85% that year. What
l.. l.. l.. l.. l.. l.. l.. l.. l.. l.. l..




was this facility's food cost per patient day (PPD)? - ANS-$4.73
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