NR 533 Week 7 Business Plan Assignment
(2023/2024), Financial Management in
Healthcare Organizations-Chamberlain
College of Nursing
NR 533 – Financial Management in Healthcare Organizations
Practice/Test Questions
1–10: Basic Financial Concepts
Q1: Which financial statement shows an organization’s revenues and expenses over a specific
period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Budget report
Answer: b) Income statement
Rationale: The income statement summarizes revenues, expenses, and net profit/loss over a
period.
Q2: The difference between total assets and total liabilities is called:
a) Revenue
b) Equity
c) Net income
d) Cash flow
Answer: b) Equity
Q3: Which type of budget is based on expected activities and services?
a) Zero-based budget
b) Incremental budget
c) Flexible budget
d) Capital budget
,Answer: c) Flexible budget
Rationale: Flexible budgets adjust according to actual volume or activity levels.
Q4: A capital budget is primarily used for:
a) Day-to-day operations
b) Long-term investments
c) Payroll
d) Supplies
Answer: b) Long-term investments
Q5: Which ratio measures the organization’s ability to meet short-term obligations?
a) Debt-to-equity ratio
b) Current ratio
c) Return on investment
d) Profit margin
Answer: b) Current ratio
Q6: Fixed costs are:
a) Costs that vary with volume
b) Costs that remain constant regardless of volume
c) Costs of medical supplies
d) Costs incurred only once
Answer: b) Costs that remain constant regardless of volume
Q7: Variable costs are:
a) Rent and utilities
b) Salaries of permanent staff
c) Costs that fluctuate with patient volume
d) Depreciation
Answer: c) Costs that fluctuate with patient volume
Q8: Break-even analysis is used to:
a) Calculate ROI
b) Determine the point at which revenue equals total costs
c) Track cash flow
d) Prepare balance sheets
Answer: b) Determine the point at which revenue equals total costs
Q9: Net present value (NPV) is primarily used to:
a) Calculate current profit
b) Evaluate the worth of future cash flows today
, c) Measure liquidity
d) Track expenses
Answer: b) Evaluate the worth of future cash flows today
Q10: The primary goal of financial management in healthcare is to:
a) Maximize patient satisfaction
b) Ensure efficient resource allocation and sustainability
c) Reduce staffing
d) Avoid regulatory compliance
Answer: b) Ensure efficient resource allocation and sustainability
11–20: Budgeting and Cost Management
Q11: A zero-based budget starts with:
a) Last year’s expenditures
b) Zero and justifies each expense
c) Predicted revenue
d) Fixed costs only
Answer: b) Zero and justifies each expense
Q12: Which expense is typically considered variable in a hospital?
a) Rent
b) Nurses’ hourly wages
c) Depreciation
d) Insurance
Answer: b) Nurses’ hourly wages
Q13: A fixed cost example is:
a) Surgical supplies
b) Utility bills
c) Nurse overtime
d) Medication for patients
Answer: b) Utility bills
Q14: Direct costs:
a) Can be traced to a service or department
b) Are shared overhead costs
c) Are not accounted for in financial statements
d) Are optional expenses
(2023/2024), Financial Management in
Healthcare Organizations-Chamberlain
College of Nursing
NR 533 – Financial Management in Healthcare Organizations
Practice/Test Questions
1–10: Basic Financial Concepts
Q1: Which financial statement shows an organization’s revenues and expenses over a specific
period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Budget report
Answer: b) Income statement
Rationale: The income statement summarizes revenues, expenses, and net profit/loss over a
period.
Q2: The difference between total assets and total liabilities is called:
a) Revenue
b) Equity
c) Net income
d) Cash flow
Answer: b) Equity
Q3: Which type of budget is based on expected activities and services?
a) Zero-based budget
b) Incremental budget
c) Flexible budget
d) Capital budget
,Answer: c) Flexible budget
Rationale: Flexible budgets adjust according to actual volume or activity levels.
Q4: A capital budget is primarily used for:
a) Day-to-day operations
b) Long-term investments
c) Payroll
d) Supplies
Answer: b) Long-term investments
Q5: Which ratio measures the organization’s ability to meet short-term obligations?
a) Debt-to-equity ratio
b) Current ratio
c) Return on investment
d) Profit margin
Answer: b) Current ratio
Q6: Fixed costs are:
a) Costs that vary with volume
b) Costs that remain constant regardless of volume
c) Costs of medical supplies
d) Costs incurred only once
Answer: b) Costs that remain constant regardless of volume
Q7: Variable costs are:
a) Rent and utilities
b) Salaries of permanent staff
c) Costs that fluctuate with patient volume
d) Depreciation
Answer: c) Costs that fluctuate with patient volume
Q8: Break-even analysis is used to:
a) Calculate ROI
b) Determine the point at which revenue equals total costs
c) Track cash flow
d) Prepare balance sheets
Answer: b) Determine the point at which revenue equals total costs
Q9: Net present value (NPV) is primarily used to:
a) Calculate current profit
b) Evaluate the worth of future cash flows today
, c) Measure liquidity
d) Track expenses
Answer: b) Evaluate the worth of future cash flows today
Q10: The primary goal of financial management in healthcare is to:
a) Maximize patient satisfaction
b) Ensure efficient resource allocation and sustainability
c) Reduce staffing
d) Avoid regulatory compliance
Answer: b) Ensure efficient resource allocation and sustainability
11–20: Budgeting and Cost Management
Q11: A zero-based budget starts with:
a) Last year’s expenditures
b) Zero and justifies each expense
c) Predicted revenue
d) Fixed costs only
Answer: b) Zero and justifies each expense
Q12: Which expense is typically considered variable in a hospital?
a) Rent
b) Nurses’ hourly wages
c) Depreciation
d) Insurance
Answer: b) Nurses’ hourly wages
Q13: A fixed cost example is:
a) Surgical supplies
b) Utility bills
c) Nurse overtime
d) Medication for patients
Answer: b) Utility bills
Q14: Direct costs:
a) Can be traced to a service or department
b) Are shared overhead costs
c) Are not accounted for in financial statements
d) Are optional expenses
