LNHA Exam Questions and Answers Latest Version 2025 Already Passed
Capital expenditure - Answers Expenses of increasing book value of facility assets
Gross profit - Answers Net sales less cost of goods
Operating profit - Answers Gross profit less operating expenses
Net earnings/net profit - Answers Equal revenues minus expenses
Retained earnings - Answers Earnings not distributed to stockholders, limited, or IRS will tax
Equities - Answers Interest in or claims upon assets by the owners- equals capital stock plus retained
earnings
Gross Income - Answers Total income from all services. Also, capital gains, interest on bonds, worker's
compensation insurance benefits
Marginal return - Answers Point at which revenues equal expenses, the break even point
Mortgage - Answers Conditional transfer of a title on property by a borrower to a lender to secure
payment of a debt or loan
Net worth - Answers Total assets less total liabilities
Capital budget, cash budget, operating budget - Answers 3 different types of budgets
Master budget - Answers Includes cash budget, capital budget, liquidity ratios, pro-forma financial
statement
Capital budget - Answers Includes real estate, buildings, equipment, usually limiting factor as re-
coverage from expenses takes long time. Medicare counts $5000 or more as capital item if item has
useful life in excess of 1 year
Cash budget - Answers Forecast of all cash receipts and disbursements. Consider schedule of cash
inflows and payments of obligations. Shows availability of cash. Makes possible plans to invest surplus
and for periods when expenses exceed income.
Integrated budget - Answers A document that projects all capital and operating costs, as well as all
revenues, and consolidates this information.
Operating budget - Answers Includes details of anticipated revenues (income) by service, and
anticipated expenditures by category. Helps to continuously study and control finances.
Economic Order Quantity (EOQ) - Answers Inventory control method that helps on when and how much
to order. Balances cost of reordering and carrying costs, and risk of running out. Must consider
shrinkage, spoilage, and theft.
Capital expenditure - Answers Expenses of increasing book value of facility assets
Gross profit - Answers Net sales less cost of goods
Operating profit - Answers Gross profit less operating expenses
Net earnings/net profit - Answers Equal revenues minus expenses
Retained earnings - Answers Earnings not distributed to stockholders, limited, or IRS will tax
Equities - Answers Interest in or claims upon assets by the owners- equals capital stock plus retained
earnings
Gross Income - Answers Total income from all services. Also, capital gains, interest on bonds, worker's
compensation insurance benefits
Marginal return - Answers Point at which revenues equal expenses, the break even point
Mortgage - Answers Conditional transfer of a title on property by a borrower to a lender to secure
payment of a debt or loan
Net worth - Answers Total assets less total liabilities
Capital budget, cash budget, operating budget - Answers 3 different types of budgets
Master budget - Answers Includes cash budget, capital budget, liquidity ratios, pro-forma financial
statement
Capital budget - Answers Includes real estate, buildings, equipment, usually limiting factor as re-
coverage from expenses takes long time. Medicare counts $5000 or more as capital item if item has
useful life in excess of 1 year
Cash budget - Answers Forecast of all cash receipts and disbursements. Consider schedule of cash
inflows and payments of obligations. Shows availability of cash. Makes possible plans to invest surplus
and for periods when expenses exceed income.
Integrated budget - Answers A document that projects all capital and operating costs, as well as all
revenues, and consolidates this information.
Operating budget - Answers Includes details of anticipated revenues (income) by service, and
anticipated expenditures by category. Helps to continuously study and control finances.
Economic Order Quantity (EOQ) - Answers Inventory control method that helps on when and how much
to order. Balances cost of reordering and carrying costs, and risk of running out. Must consider
shrinkage, spoilage, and theft.
