HCAD 375 Exam 1 Questions with Correct Answers Latest Update

HCAD 375 Exam 1 Questions with Correct Answers Latest Update Many facilities either employ or contract with _____ to perform accounting and/or financial analysis - Answers Accountants A 1 year accounting period is generally referred to as - Answers An organization's fiscal year What is the basic accounting equation? - Answers Assets = Liabilities + Owners Equity What type of accounting method is generally used in health care? - Answers (Accounting in health care follows- GAAP) Accrual accounting is the standard for heath care accounting Why do many organizations hire financial specialists? - Answers -Due to a bunch of special forms that need to be filled out for Medicare and Medicaid reimbursement, facilities call financial specialists who deal exclusively with regulations & procedures inherent in Medicare and Medicaid reimbursement -Most facilities also have a fixed budget and require timely remuneration Describe the role of a "bookkeeper" - Answers -Not formally trained in accounting but handles entries such as -Addressing accounts receivable and monitor resident billing -Mailing monthly statements to residents and families -Writing checks -Keeping track of disbursements -Making sure office finances are being addressed in a timely and orderly fashion The "income statement" may also be called - Answers Profit/Loss statement The ____ examines financial status at a point in time - Answers Balance sheet The ____ examines financial activity over a period of time - Answers Income statement What has led to increased HC costs? - Answers -Aging population -Newly insured under ACA -Uninsured -Rx drugs -More advanced medical technology -Chronic disease -Defensive medicine What has led to decreased HC costs? - Answers -Employer incentives -Increase (cost conscious) -Increase in IT to manage chronic care -Prevent medical errors -Generic drugs -More outpatient/home services -Improved management techniques -R4P value-based purchasing -Economics of scale in purchasing -Evidence based medicine Name and describe the 4 elements of financial management - Answers Planning- Making sure that each area of the organization is following established plans Controlling- Making choices among available alternatives Organizing- Deciding how to use organizational resources to most effectively carry out established plans Decision making- Identifying steps that must be taken to accomplish an organizations objectives Describe differences between Proprietary vs Not-For-Profit health care organizations - Answers Proprietary: -Pays all taxes -Corporations, partnerships, or individuals Not-For-Profit: -Do not pay income, property, or sales taxes -Do pay payroll taxes -Contribute to community Give an example of how an organizational structure might influence a LTC administrator's role in financial management - Answers -How involved they are in finances -How they look and interpret finances Ex) If a LTC facility is smaller, an administrator might/have to take on all the roles. If the facility is bigger (corporate), an administrator may have a DON, accountant, or HR person on staff Describe key differences between Managerial vs. Financial accounting - Answers Managerial: (-Compares results against goals -Determines reasons for variation -Helps identify corrective action -Forecasting/planning -Analyzes information