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Accounting
Finals Exam Review (Qns & Ans)
2025
1. Which of the following best defines "cost allocation" in
healthcare accounting?
- A. Tracking cash flow from operations
- B. Assigning indirect costs to various departments or services
- C. Calculating revenue from patient services
- D. Managing accounts receivable
Correct ANS: B. Assigning indirect costs to various
departments or services
©2025
, Rationale: Cost allocation distributes indirect costs such as
utilities or administration across departments to accurately assess
financial performance.
2. What is the primary purpose of a "variance analysis" in
healthcare decision-making?
- A. To compare actual performance against budgeted
expectations
- B. To forecast future revenues
- C. To assess patient satisfaction levels
- D. To allocate fixed costs among service lines
Correct ANS: A. To compare actual performance against
budgeted expectations
Rationale: Variance analysis identifies areas of financial
performance that deviate from the budget.
3. The "break-even point" in healthcare accounting refers to:
- A. The level of activity where total revenue equals total costs
- B. The point where variable costs are minimized
- C. The profitability threshold for premium services
- D. The point where assets exceed liabilities
Correct ANS: A. The level of activity where total revenue
equals total costs
©2025
, Rationale: Break-even analysis helps organizations determine
the minimum activity level needed to avoid losses.
4. Which method of costing is most commonly used in healthcare
organizations for complex procedures?
- A. Activity-Based Costing (ABC)
- B. Job-Order Costing
- C. Direct Costing
- D. Absorption Costing
Correct ANS: A. Activity-Based Costing (ABC)
Rationale: ABC allocates costs based on activities and is
suitable for procedures with multiple resource inputs.
---
Fill-in-the-Blank Questions
5. The __________ method tracks and allocates expenses related
to shared resources, such as diagnostic equipment, across various
departments.
Correct ANS: Cost-pooling
©2025
Accounting
Finals Exam Review (Qns & Ans)
2025
1. Which of the following best defines "cost allocation" in
healthcare accounting?
- A. Tracking cash flow from operations
- B. Assigning indirect costs to various departments or services
- C. Calculating revenue from patient services
- D. Managing accounts receivable
Correct ANS: B. Assigning indirect costs to various
departments or services
©2025
, Rationale: Cost allocation distributes indirect costs such as
utilities or administration across departments to accurately assess
financial performance.
2. What is the primary purpose of a "variance analysis" in
healthcare decision-making?
- A. To compare actual performance against budgeted
expectations
- B. To forecast future revenues
- C. To assess patient satisfaction levels
- D. To allocate fixed costs among service lines
Correct ANS: A. To compare actual performance against
budgeted expectations
Rationale: Variance analysis identifies areas of financial
performance that deviate from the budget.
3. The "break-even point" in healthcare accounting refers to:
- A. The level of activity where total revenue equals total costs
- B. The point where variable costs are minimized
- C. The profitability threshold for premium services
- D. The point where assets exceed liabilities
Correct ANS: A. The level of activity where total revenue
equals total costs
©2025
, Rationale: Break-even analysis helps organizations determine
the minimum activity level needed to avoid losses.
4. Which method of costing is most commonly used in healthcare
organizations for complex procedures?
- A. Activity-Based Costing (ABC)
- B. Job-Order Costing
- C. Direct Costing
- D. Absorption Costing
Correct ANS: A. Activity-Based Costing (ABC)
Rationale: ABC allocates costs based on activities and is
suitable for procedures with multiple resource inputs.
---
Fill-in-the-Blank Questions
5. The __________ method tracks and allocates expenses related
to shared resources, such as diagnostic equipment, across various
departments.
Correct ANS: Cost-pooling
©2025
