FACHE Finance Exam Questions and
Answers
Controllership - ANSWER-Transaction Accounting
Financial Accounting
Managerial Accounting
Goal Setting and Budgeting
Financial Mangement - ANSWER-Financial Planning
Pricing Clinical Services
Financial Structures
Securing and Managing Liquid Assets
Managing Multi Corporate Accounting
Auditing - ANSWER-Internal Audits
Compliance Review
External Audit
Continuous Improvement of the Accounting & Finance Functions - ANSWER-
Stakeholder Satisfaction
Improve Performance
Reporting Financial Information (Standard for HCOs) - ANSWER-Balance Sheet
Income or Profit-and-Loss Statement
Statement of sources and uses of funds
Statement of changes in fund balances
Freedom of Information Act (FOIA) - ANSWER-Provides public the right to request
access to records from any federal agency. pubic should have general access to
information
General Ledger - ANSWER-Technically, the record of all the firm's transactions; the
term often refers to the fixed and collective assets, such as depreciation, that must be
allocated to operational functions
Not-for-profit HCO have substantial obligations to report their financial activities through
the the IRS Form 990 mainly for - ANSWER-Community Benefit and to Justify Tax
Exempt Status
, Net Revenue - ANSWER-Income actually received as opposed to that initially posted;
equal to gross revenue - adjustments for bad debts, charity, and discounts to third
parties
Gross Revenue - ANSWER-An entry into the patient to the patient ledger of the charge
for a specific healthcare service; no longer a meaningful measure
Bad Debts - ANSWER-Cost for patients who are unable to pay for care
Charity Care - ANSWER-Care given to the needy without expectation of payment
Operating Budget - ANSWER-The aggregate of accountability-center expenditure
budgets and the corporate revenue budget
budgets must forcast - ANSWER-At least 18 months into the future. well-run institutions
budget a second or event third year in the yearly budget cycle
Fixed cost - ANSWER-Cost that does not changed with an increase or decrease in the
amount of goods or services produced
Operating Leverage - ANSWER-The degree to which a firm incurs a combination of
fixed and variable cost. The higher the operating leverage the greater the potential
danger from forecasting risk
When evaluating capital budge performance, what is the best indicator of operating
leverage - ANSWER-Expense ratio
Expense ratio - ANSWER-Metric used in health insurance industry computed by
dividing company's associated with providing health services by the revenues from
member premiums
Pareto analysis - ANSWER-A bar chart format, with the items rank ordered on a
dependent variable, such as cost, profit of business satisfaction that Examines the
components of a problem in term of their contribution
Operating Budget includes - ANSWER-Accountability-unit budgets by report period and
kind of resource (cost are negotiated with the other five dimensions of financial
scorecards)
Aggregate expenditures budgets, or "roll ups," that summarize larger sections of the
organization that parallel the accountability hierarchy (similar experience aggregates are
made of the goals for the other operational dimensions)
Revenue budgets that show expected income and profits for DRGs at organization
levels that parallel the payment aggregate (leading institutions report revenues only at
aggregates that can be help accountable)
Answers
Controllership - ANSWER-Transaction Accounting
Financial Accounting
Managerial Accounting
Goal Setting and Budgeting
Financial Mangement - ANSWER-Financial Planning
Pricing Clinical Services
Financial Structures
Securing and Managing Liquid Assets
Managing Multi Corporate Accounting
Auditing - ANSWER-Internal Audits
Compliance Review
External Audit
Continuous Improvement of the Accounting & Finance Functions - ANSWER-
Stakeholder Satisfaction
Improve Performance
Reporting Financial Information (Standard for HCOs) - ANSWER-Balance Sheet
Income or Profit-and-Loss Statement
Statement of sources and uses of funds
Statement of changes in fund balances
Freedom of Information Act (FOIA) - ANSWER-Provides public the right to request
access to records from any federal agency. pubic should have general access to
information
General Ledger - ANSWER-Technically, the record of all the firm's transactions; the
term often refers to the fixed and collective assets, such as depreciation, that must be
allocated to operational functions
Not-for-profit HCO have substantial obligations to report their financial activities through
the the IRS Form 990 mainly for - ANSWER-Community Benefit and to Justify Tax
Exempt Status
, Net Revenue - ANSWER-Income actually received as opposed to that initially posted;
equal to gross revenue - adjustments for bad debts, charity, and discounts to third
parties
Gross Revenue - ANSWER-An entry into the patient to the patient ledger of the charge
for a specific healthcare service; no longer a meaningful measure
Bad Debts - ANSWER-Cost for patients who are unable to pay for care
Charity Care - ANSWER-Care given to the needy without expectation of payment
Operating Budget - ANSWER-The aggregate of accountability-center expenditure
budgets and the corporate revenue budget
budgets must forcast - ANSWER-At least 18 months into the future. well-run institutions
budget a second or event third year in the yearly budget cycle
Fixed cost - ANSWER-Cost that does not changed with an increase or decrease in the
amount of goods or services produced
Operating Leverage - ANSWER-The degree to which a firm incurs a combination of
fixed and variable cost. The higher the operating leverage the greater the potential
danger from forecasting risk
When evaluating capital budge performance, what is the best indicator of operating
leverage - ANSWER-Expense ratio
Expense ratio - ANSWER-Metric used in health insurance industry computed by
dividing company's associated with providing health services by the revenues from
member premiums
Pareto analysis - ANSWER-A bar chart format, with the items rank ordered on a
dependent variable, such as cost, profit of business satisfaction that Examines the
components of a problem in term of their contribution
Operating Budget includes - ANSWER-Accountability-unit budgets by report period and
kind of resource (cost are negotiated with the other five dimensions of financial
scorecards)
Aggregate expenditures budgets, or "roll ups," that summarize larger sections of the
organization that parallel the accountability hierarchy (similar experience aggregates are
made of the goals for the other operational dimensions)
Revenue budgets that show expected income and profits for DRGs at organization
levels that parallel the payment aggregate (leading institutions report revenues only at
aggregates that can be help accountable)
