I want to done this one before 8 hours. Thank you, Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 2 Multiple Choice 1. The chart of accounts: A. outlines the elements of your company in an organized manner B. maps out account titles with a method of numeric coding C. is designed to compile financial data in a uniform manner that can be de-coded by the user D. all of the above E. (A) and (B) only Page: 15 2. A chart of accounts format can contain: A. 3 items B. 5 items C. 4 items D. any of the above Pages: 15-17 3. Of the four segments that make a healthcare financial system work, which segment provides evidence that an event has occurred? A. The reporting system B. The accounting system C. The original records D. The information system E. Any of the above Page: 11-12 4. Of the four segments that make a healthcare financial system work, which segment gathers evidence that an event has occurred? A. The original records B. The information system C. The accounting system D. The reporting system E. Any of the above Page: 11-12 5. Regarding healthcare financial systems, the knowledgeable manager should be able to: A. Understand that four separate segments of a system exist B. Recognize how the segments fit together within a particular organization C. Recognize where his or her duties fit within these segments D. Be able to make executive decisions concerning a particular segment E. A, B & C F. A, B & D G. A, C & D H. All of the above Page: 11-12 6. When creating a report to communicate financial information, the manager must typically use a standard format that: A. Is used by a healthcare trade organization B. Is accepted in the accounting profession C. Uses terminology that is accepted in your area of the healthcare industry D. A & B E. A & C F. B & C G. All of the above Page: 20 7. When creating a report to communicate financial information, the manager should: A. Organize the body of the report in a logical flow B. Place extensive detail in the body of the report C. Place the executive summary in the appendix D. A & B E. A & C F. B & C G. All of the above Page: 20 8. Of the four segments that make a healthcare financial system work, which segment records evidence that an event has occurred? A. The accounting system B The reporting system C. The original records D. The information system E. Any of the above Page: 11-12 9. Of the four segments that make a healthcare financial system work, which one reports about the effect occurring from an event? A. The original records B. The information system C. The accounting system D. The reporting system E. Any of the above Page: 11-12 10. Within the annual management cycle, raw data: A. Is typically operating information B. Is unadjusted C. Has been adjusted and verified D. A & B E. A & C F. None of the above Page: 19 11. Raw data will typically appear in the organizations: A. Quarterly report B. Annual year-end report C. Quarterly statistics D. A & B E. A & C F. B & C G. None of the above Page: 19-20 12. Quarterly reports: A. Are often used by managers as milestones B. May take the form of a quarterly budget review C. Have been verified but have not yet been balanced D. A & B E. A & C F. B & C G. None of the above Page: 20 13. Interim reports: A. Are generated some time during the organizations reporting period B. Are generated at the end of the organizations reporting period C. Have been verified, adjusted and balanced D. Have been verified and adjusted but not yet balanced E. A & C only F. A & D only G. B & C only H. B & D only Page: 19-20 14. Within the annual management cycle, annual year-end reports will: A. Allow the closing out of the information system so a new cycle can begin with the new year B. Report the end of a specific reporting period Continue the information systems reporting cycle into a new year rather than closing it out C. A & B D. A & C E. B & C F. None of the above Page: 20 15. The primary purpose of annual year-end reports is to report the organizations operations for the period to: A. Outsiders or third parties B. The organizations managers C. Both of the above D. Either of the above Page: 20 16. If the heading on a report reads For the year ended June 30, we can assume that the report covers a: A. Fiscal year B. Full twelve-month period C. Stub period D. A & B E. A & C F. B & C G. None of the above Page: 20 17. If the heading on a report reads For the three-month period ended December 31, we know that the report covers a: A. Fiscal year B. Stub year C. Stub period D. A & B E. A & C F. B & C G. None of the above Page: 20 18. The individual transaction: A. Creates the original record B. Is recorded into a subsidiary journal C. Ends the progress of a transaction information flow D. A & B E. A & C F. B & C G. None of the above Page: 18 19. Actions affecting subsidiary journals include: A. Individual transactions are recorded B. Groups of transactions are gathered and summarized C. Similar transactions are grouped and balanced D. A & B E. A & C F. B & C G. None of the above Page: 18 20. Actions affecting the general ledger include: A. Statements reflecting transactions are created B. Groups of transactions are gathered and summarized C. Adjusted and reviewed transactions for the period are balanced D. A & B E. A & C F. B & C G. None of the above Page: 18 21. All transactions for the period reside in the: A. General ledger B. Cash receipts and cash disbursements journals C. Accounts receivable and accounts payable journals D. A & B E. A & C F. B & C G. None of the above Page: 18 22. Subsidiary journals include the: A. Trial balance B. General ledger C. Payroll journal D. Any of the above E. None of the above Page: 19 23. The text illustrates the information system components for an ambulatory care setting that uses a clinical and financial data repository (both clinical and financial data are fed into the same information system). Links to this system are explained as follows: A. The electronic data information (EDI) link to insurance company databases is a system output -yes B. The electronic data information (EDI) link to insurance company databases is a system input -no C. An automated medical record link provides additional input -yes D. A & C E. B & C F. None of the above Page: 12-13 24. Inputs into the systems ambulatory care setting data repository (as described in the previous question) include the following: A. Scheduling system data B. Outpatient financial information C. Inpatient financial information, if relevant D. Inpatient care plan information, if relevant E. A & B F. A, B & C G. A, B & D H. All of the above Page: 12-13 25. The concept of flowsheets explains and illustrates the flow of: A. Activities B. Accounts receivable C. Accounts payable D. A & B E. A & C F. B & C G. All of the above Page: 13 26. By illustrating information flow, flowsheets answer which of the following questions? A. What is the specific piece of information? B. Who is initially responsible for this piece of information? C. How does the information enter the system? D. All of the above E. None of the above Page: 13 27. When a patient information flowsheet illustrates the flow resulting from deficient data, which of these causes and consequences may apply? A. One cause may be a bad address on the billing statement B. One consequence is that the payer rejects the bill C. Another consequence is that the provider does not receive payment D. A good financial manager may recognize the significance of this flow and correct the cause E. A, B & C F. All of the above Page: 13-14 28. Joseph, an RN in the emergency room of Sample Hospital, begins his Saturday night shift by punching his time card into the machine by the employee entrance. From what you understand about the four segments that make a healthcare system work, where does Josephs time card belong? In the: A. Original records segment B. Information system segment C. Accounting system segment D. Reporting system segment E. None of the above Page: 11 29. Mountain View Nursing Facility uses a chart of accounts format that is made up of three sets of digits. The first set of digits represents the financial statement element, the second is for a primary subclassification and the third is for a secondary subclassification. To which of these three sets of digits would Petty cash for the front office belong? The: A. Financial statement element B. Primary subclassification C. Secondary subclassification D. None of the above C Page: 15 30. In summary, the chart of accounts: ] A. Is a map that the financial manager must and should understand B. Can be infinitely customized for an organizations purposes C. Has generic examples available for reference purposes D. A & B E. A & C F. B & C G. All of the above Page: 15-18 True or False 1. One output from the clinical and financial data repository is insurance verification for patients through an electronic data information link to insurance company databases. Page: 12 2. Of the four segments that make a financial management system work, the reporting system provides evidence that some event has occurred. Page: 11 3. Quarterly reports and statistics are called "interim reports" and generally contain raw data. Page: 19 4. Most organizations have a 12-month reporting period known as a fiscal year. Anything less than a full 12-month year is called a "stub period" and is fully spelled out in the heading of the report. Page: 20 5. Flowsheets are useful because they portray who is responsible for what piece of information as it exits the system. Pages: 13 6. When communicating financial information effectively to others, it is important to place extensive detail within the body of the report. Page: 20 Short Answer 1. Flowsheets illustrate the flow of activities that capture __________. Page: 13 2. The four segments that make a financial system work include the original records, the information system, the accounting system, and the __________ system. Page: 11 3. The books and records of the financial information system for the organization serve to __________. Page: 18 4. All transactions for the period reside in the __________ Page: 18 Multiple Choice 1. The real key to understanding finance is understanding: A. the chief executive officers mission statement B. the elements of finance and their relationship to each other C. the organizations financial analysis software Page: 5 2. Business management as a discipline for educational purposes began in the United States in the: A. 1700s B. 1800s C. 1900s D. None of the above Page: 3 3. Healthcare finance can be described as a method of getting money in and out of the business. Which of these descriptions is correct? A. Getting money in represents revenues B. Getting money out represents expenses C. Getting money in represents outflow D. Getting money out represents inflow E. A & B F. A & C G. B & D H. All of the above Page: 4 4. When healthcare finance is considered a method of getting money in and out of the business, the successful manager is able to achieve the most beneficial outcome by adjusting the inflow and outflow through what actions? A. Organizing B. Controlling C. Decision making D. Planning E. A & B F. B & C G. C & D H. All of the above Ans: H Page: 4 5. The manager with a process viewpoint generally: A. Is responsible for clinical outcomes B. Is responsible for the reporting function of the organization C. Is responsible for data accumulation D. All of the above E. None of the above Ans: C Page: 4 6. The manager with a financial viewpoint generally: A. Works with the system of the organization B. Is responsible for the reporting function of the organization C. May be responsible for service delivery within the organization D. All of the above Ans: B Page: 4 7. The manager with a clinical viewpoint generally: A. May be responsible for service delivery B. May have direct interaction with patients C. Is responsible for clinical outcomes D. All of the above Ans: D Page: 4 8. The healthcare industry is primarily a: A. Manufacturing industry B. Service industry C. Electronic information industry D. Managed care industry E. None of the above Page: 4 9. As part of the history of financial management, who developed the concept of specialization for efficiency? A. Plato B. Socrates C. The Egyptians D. None of the above Page: 3 10. As another part of the history of financial management, who developed a minimum-wage system in 1800 b.c.? A. The Chinese B. The Egyptians and Sumerians C. Hammurabi D. None of the above Page: 3 11. One purpose of planning is to: A. Ensure effective resource use B. Identify objectives C. Make informed choices D. A & B E. A & C F. B & C G. All of the above Page: 5-6 12. Another purpose of planning is to: A. Provide supervision B. Identify ineffective areas C. Identify required steps to accomplish objectives D. A & B E. A & C F. B & C G. All of the above Ans: C Page: 5 13. The purpose of controlling is to: A. Ensure that plans are being followed B. Ensure effective resource use C. Identify objectives D. A & B E. A & C F. B & C G. All of the above Ans: A Page: 5 14. When a financial manager studies current reports and compares them with reports from earlier periods to see if established plans are being followed, these reports are called: A. Subsidiary reports B. The general ledger C. Feedback D. A & B F. B & C G. All of the above Ans: C Page: 5 15. Decision making: A. Involves analysis and evaluation B. Requires making choices among available alternatives C. Relies on information D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 6 16. Deciding how to use the resources of the organization: A. Is the element of financial management called organizing B. Is the element of financial management called directing C. Will result in the most effective way to carry out established plans D. A & B E. A & C F. B & C G. All of the above Page: 5 17. When working on a day-to-day basis, the manager is most likely: A. Keeping the results of organizing running efficiently B. Directing C. Organizing D. A & B E. A & C F. B & C G. All of the above Page: 5 18. Managers who are affiliated with the information system hierarchy in the organization typically operate from a: A. Financial view B. Process view C. Clinical view D. Any of the above E. None of the above Page: 4 19. Managers who perform much of the organizations strategic planning typically operate from a: A. Clinical view B. Process view C. Financial view D. Any of the above E. None of the above Page: 4 20. Accounting primarily intended for outside, or third party, use: A. Is known as financial accounting B. Is known as managerial accounting C. Emphasizes external reporting D. Requires the use of generally accepted accounting principles E. A, C & D F. A & C G B & C H. B, C & D Ans: E Page: 7-9 21. External reporting to third parties in health care (depending upon type of reporting organization) may include reporting to: A. Stockholders B. Government entities C. Health plan payers D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 7 22. Managerial accounting is considered to be: A. Prospective B. Retrospective C. Both prospective and retrospective D. A & B E. A & C F. B & C G. None of the above Ans: C Page: 9 23. Financial reporting primarily deals with: A. Future transactions such as projecting outcomes and preparing budgets B. Transactions that have already occurred C. Both transactions that have already occurred and certain future transactions D. A & B E. A & C F. B & C G. None of the above Page: 7-9 24. Common uses of managerial accounting typically include: A. Pricing of services yes B. Planning and control of operations yes C. Control of performance measures yes D. Reporting service profitability yes E. A, B, C F. B, C, D G. A, C, D H. All of the above Page: 9 25. Within the origins of financial management, who wrote about the universal function of management in human endeavors? A. Plato B. Socrates C. The Sumerians D. None of the above Page: 3 26. The basic types of healthcare organizations may be described as: A. Profit-oriented B. Nonprofit oriented C. Foundations that comply with all legal requirements D. A & B E. A & C F. B & C G. None of the above Page: 6 27. Proprietary entity subgroups include: A. Voluntary entities B. Government entities C. Entities that pay no income tax D. A & B E. A & C F. B & C G. None of the above Page: 6 28. A hospital taxing district and a state university with an affiliated teaching hospital can both be described as: A. Government entities B. Voluntary entities C. Entities that pay no income tax D. Entities that must pay income tax E. A & C F. B & C G. A & D H. B & D Page: 6 29. The purpose of an organization chart includes: A. Indicating how responsibility is assigned to managers B. Illustrating the structure of the organization C. Designating the formal lines of communication among and between external stakeholders D. A & B E. A & C F. B & C G. All of the above Page: 7 30. The composition of an organization chart can be described as follows: A. Each box on the chart represents a particular area of management responsibility B. Each line between the boxes represents a line of authority C. The overall composition of the chart shows the degree of centralization or decentralization within the organization D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 7 True or False 1. Managers within health care organizations must have one of two views: either financial or process. Ans: False Page: 4 2. Much of the strategic planning for the organization is performed by managers with a financial view of the organization. Ans: True Page: 4 3. Management as a discipline for educational purposes did not begin in the United States until after 1900. Ans: False Page: 3 4. The healthcare industrys essential business is the delivery of healthcare services. Ans: True Page: 4 5. Of the four elements of financial management, the planning element makes sure each area of the organization is following the plans that have been established. Ans: False Page: 5 6. Government organization types may include the following: federal; city-county; churches; and/or state universities Page: 6 7. The purpose of an organization chart is to indicate how responsibility is assigned to managers and to certain outside third parties. Page: 7 8. Managerial accounting is primarily for third party or outside use. Page: 9 9. Managerial accounting is prospective as well as retrospective. Page: 9 Short Answer 1. The healthcare industry is a ________ industry. . Page: 4 2. The purpose of one element of financial management is to ensure effective resource use and provide daily supervision. Which element is this? Ans: The organizing and directing element. Page: 5 Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 3 Multiple Choice 1. If a note payable is going to be paid over a three-year period, the liability may be classified as: A. short-term B. long-term C. both short-term and long-term Page: 27 2. Examples of assets include: A. inventory B. land C. accounts receivable D. cash E. all of the above Page: 26 3. The amount owed to vendors: A. Is a liability B. Is recognized as accounts payable C. Is recognized as accounts receivable D. A & B E. A & C F. B & C Page: 27 4. The language of finance includes: Assets, liabilities and net worth English, French and Spanish Books about finance A & B A & C B & C None of the above Page: 25 5. Assets are: A. What the organization owns and/or controls: B. What the organization owes C. Economic resources with expected future benefits D. Economic obligations E. A & C F. A & D G. B & D H. None of the above Page: 25 6. Liabilities are: A. Economic obligations B. What the organization owns C. Debts that are payable D. What the organization owes E. A & C F. B & C G. A, C & D H. None of the above Page: 25 7. Net worth is: A. What the business is worth B. What the business is worth, net of liabilities C. What the business is worth, net of receivables D. None of the above Page: 25 8. An owner has: A. A claim to the entitys assets B. A claim to the entitys liabilities C. Invested in the business D. A & B E. A & C F. B & C G. All of the above Page: 25 9. The term fund balance may be properly used by a: A. Not-for-profit organization B. U.S. governmental entity C. For-profit corporation D. For-profit sole proprietor E. A & B F. C & D G. None of the above Page: 28 10. By their definition not-for-profit organizations should not have equity. A. Correct B. Not correct C. Not applicable to not-for-profits Page: 28 11. If a balance sheet contains the terms capital stock and retained earnings, then we can deduce that the organization is a for-profit: A. Sole proprietor B. Partnership C. Corporation D. None of the above Page: 28 12. All types of business receivables are assets: A. Correct B. Not correct C. Not applicable Page: 26 13. An organizations economic resources include: A. Accounts receivable B. Notes receivable C. Notes payable D. A & B E. A & C F. B & C G. None of the above Page: 26 14. An organizations economic resources may also include: A. Inventory on hand B. Cash on hand C. Buildings D. A & B E. A & C F. B & C G. All of the above Page: 26 15. Liabilities may be called: A. Insider claims B. Outsider claims C. Either of the above D. Neither of the above Page: 25 16. Creditors are those: A. To whom debts are due B. Who hold equity in the organization C. Neither of the above Page: 25 17. The Green Tree Nursing Facility possesses a note receivable in the amount of $12,000. The note will not be paid until Mrs. Jones estate is settled, and her attorneys have informed Green Trees accountant that payment cannot be expected before, at the earliest, eighteen months from now. Consequently the accountant will record this note receivable as a: A. Current, or short-term asset B. Long term asset C. Long term liability D. None of the above Page: 26 18. The Green Tree Nursing Facility possesses another note receivable in the amount of $9,000. This note will be paid in three installments: $3,000 in six months, $3,000 in eighteen months, and the remaining $3,000 in twenty-four months. The accountant will record this note receivable as follows: A. Current, or short-term asset of $9,000 B. Long term asset of $9,000 C. Current asset of $3,000 and long term asset of $6,000 D. Current asset of $6,000 and long term asset of $3,000 E. None of the above Page: 26 19. The accounting equation that reflects a relationship is often described as Assets equal Liabilities plus Net Worth. Is the equation Assets equal Liabilities plus Owners Equity also appropriate and correct? A. Yes B. No C. Dont know Page: 25-26 and 28 20. The accounting equation that reflects a relationship is often described as Assets equal Liabilities plus Net Worth. Can the equation Assets equal Liabilities plus Fund Balance also be correct? A. Yes, if used by the proper organization B. No, it is not appropriate C. Not applicable Page: 25-26 and 28 21. Payroll taxes withheld are: A. A liability B. An asset C. Due to be paid to the government D. A & C E. B & C Page: 27 22. The Horizon Pharmaceutical Company makes quarterly payments of payroll taxes withheld, plus the employers portion of these payroll taxes. Prior to the quarterly payment, should these taxes be recorded as a: A. Current liability B. Short-term liability C. Long term liability D. Current asset E. A & B F. B & C Page: 27 23. Buildings and equipment are typically stated at a net figure called: A. Book value B. Long term value C. Historical value D. None of the above Page: 26-27 24. The original cost, or historical cost, of buildings and equipment is reduced by: A. Accumulated depreciation B. Accumulated liabilities C. Reserve for amortization D. None of the above Page: 26-27 25. A mortgage payable: A. Is recognized as a liability B. Typically has a portion recorded as a short term payable C. Typically has a larger portion recorded as a long term payable D. May be recognized as an other asset E. A & B F. A & C G. A & D H. A, B & C Page: 27 26. At ABC company, if assets equal $50,000 and liabilities equal $30,000, what is the total of liabilities and net worth? A. $20,000 B. $50,000 C. $70,000 D. None of the above Page: 25-26 27. At XYZ corporation, if retained earnings are $10,000 and liabilities are $25,000, what is the total asset amount? A. $35,000 B. $50,000 C. An unknown figure D. None of the above Page: 25-26 28. At the General Care Clinic, if total assets are $100,000 and long term assets are $60,000 and other assets are $10,000 what is the current asset amount? A. $30,000 B. $40,000 C. Neither of the above Page: 25-26 29. Equity is the: A. Money value of property B. Ownership right in property C. Both of the above D. Neither of the above Page: 27-28 30. At the Worth & Williams Clinic, if short-term liabilities are $10,000, long-term liabilities are $70,000, owners equity is $30,000 and current assets are $20,000. What is the total asset figure? A. $100,000 B. $110,000 C. $130,000 D. None of the above Page: 25-26 True or False 1. "Insider claims" are called owner's equity or net worth because these are claims held by owners of the business. Page: 25 2. Liabilities are also called "insider claims". Page: 25 3. The three parts of the accounting equation must always balance among themselves, because that is how they fit together. Page: 26 4. Classification of a note payable liability depends on the length of time that payment is promised. Page: 27 Short Answer 1. A sole proprietorship's or a partnership's net worth may be labeled as __________. Ans: owner's equity Page: 28 2. A corporation will generally report two types of equity accounts: "Capital Stock" and "__________". Ans: retained earnings Page: 28 3. The economic resources that have expected future benefit to the business are called __________. Page: 25 4. The accounting equation that reflects a relationship among three parts can be stated as follows: "Liabilities plus Net Worth equals __________". Pages: 25-26 5. "__________ assets" is another word for short-term assets. Page: 26 6. If an asset cannot be converted into cash within a twelve-month period, it is considered to be a __________ asset. Ans: long-term Page: 26 Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 4 Multiple Choice 1. Pre-determined per-person payment indicates: A. payment after the service is delivered B. payment before the service is delivered C. either A or B Page: 32 2. Major deductions from revenue include: A. provision for bad debts B. contractual allowance C. charity service D. all of the above Page: 32-33 3. The Medicaid program: A. is funded exclusively by federal funds B. provisions are state specific within broad federal national guidelines C. both of the above Page: 34 4. The Medicare program legislation is contained in: A. Title XIX of the Social Security Act B. Title XVIII of the Social Security Act C. both of the above Page: 33 5. Typical classifications used to group revenue include: A. revenue source B. revenue centers C. care settings D. service lines E. all of the above Pages: 36-38 6. In the case of healthcare, revenue is typically earned by: A. Rendering services to the community B. Rendering services to patients C. Professionals such as physicians D. Organizations such as hospitals Page: 31 7. The term revenue represents: A. Amounts earned by an organization B. Amounts expended by an organization C. The excess of cash remaining after disbursements D. None of the above Page: 31 8. Revenue represents: A. Actual cash inflows B. Expected cash inflows C. Actual cash outflows D. Expected cash outflows E. A & B F. C & D G. None of the above Page: 31 9. Revenue typically represents earned amounts that are: A. Due to the organizations major business B. Due to any business function the organization may perform C. Neither of the above Page: 31 10. Revenues can be received in the form of: A. Cash B. Credit C. Either cash or credit D. None of the above Page: 31 11. Most, though not all, healthcare revenues are received in the form of: A. Cash B. Credit C. Notes receivable D. Exchange of services E. None of the above Page: 31 12. Revenue is typically defined as the value of services rendered, expressed at: A. Established rates net of discounts B. Regional established rates C. Market value D. None of the above Page: 31 13. Assume the following: Greenville Hospitals full established rate for a certain procedure is $200, but the Eastern Health Plans managed care contract pays the hospital only $180 for the procedure. Required: What is the correct recorded revenue figure? A. $180 B. $200 C. $190 D. None of the above Page: 31 14. Charity service is: A. Generally defined as services provided to financially indigent patients B. Represents a major type of deduction from revenue classification C. Both of the above D. Neither of the above Page: 33 15. The Town Center Clinics physician group has contracted with various managed care plans. For visit code 99213, Plan A has contracted to pay $55.00, Plan B has contracted to pay $39.00, and Plan C has contracted to pay $46.00. (These rates are examples only.) The variation in amounts paid by managed care plans for this visit code is: A. Commonly accepted in healthcare today B. Unusual and not a commonly accepted method C. Considered to be a survival method D. None of the above Page: 33 16. Allowance for bad debts: A. Is also known as a provision for doubtful accounts B. Represents a major type of deduction from revenue classification C. Both of the above D. Neither of the above Page: 33 17. Revenue amounts estimated to be uncollectible are: A. Considered to be deductions from revenues B. Are recorded on the organizations books as deductions from revenue C. Considered to be part of the revenue stream D. Are never recorded on the organizations books E. A & B F. C & D Page: 32 18. Contractual allowances: A. Are often for composite services B. Are never for composite services C. Not applicable Page: 32 19. Contractual allowances may be entered on the books of: A. Hospitals B. Physician offices C. Both of the above D. Not applicable Page: 32-33 20. If the full established rate for a procedure is $1,000 and the agreed-upon contractual rate to be paid is $800, then the $200 difference is recorded on the books of the organization as: A. A contractual allowance B. A discount C. Neither of the above Page: 32 21. Whether payment is received before or after service delivery: A. Often influences the amount of liabilities recorded B. Is one way that expenses are classified C. Often influences the amount of revenue received D. Is one way that revenue is classified E. A & B F. C & D G. None of the above Page: 31 22. The traditional payment method in health care is: A. Payment before service is delivered B Payment after contracts are negotiated C. Payment after service is delivered D. None of the above Page: 31 23. Basic types of payment after service is delivered include: A. Fee for service B. Discounted fee for service C. Predetermined per-person payment D. A & B E. A & C F. B & C Page: 32 24. Predetermined per-person payment received: A. Is a payment method after the service is delivered B. Generally consists of an amount received at the agreed-upon rate C. Is typically a per-person count at a particular point in time D. A & B E. A & C F. B & C G. None of the above Page: 32 25. If a contractual agreement to pay for services uses varying assumptions about the group to be served: A. Significant variation in such assumptions will affect the rates that are set for these services B. The use of such group assumptions indicates this is an agreement to pay before service is delivered C. The use of such group assumptions indicates this is an agreement to pay after service is delivered D. A & B E. B & C F. None of the above Page: 32 26. Sources of healthcare revenue in the United States include: A. A variety of public programs B. Private payers C. Certain governmental sources D. All of the above E. None of the above Page: 33 27. Discounted fee for service contracts may include fee schedules. A. Correct B. Not correct C. Not applicable Page: 32 28. Payer mix: A. Represents the various proportions of revenues that are realized from different types of payers B. Is a measure often included in a healthcare organizations profile C. Is called payer mix in part because the sources of healthcare revenue are typically called payers D. All of the above E. None of the above Page: 33 29. Grouping revenue by care settings for planning and control recognizes: A. Different sites at which services are delivered B. Activities that are grouped by responsibility center C. Similar services and groups them into service lines D. The most basic grouping of inpatient versus ambulatory services E. A & B F. B & C G. A & D ] Page: 36-37 30. One method of grouping revenue is by revenue source. Such grouping by revenue source may typically include the following: A. Title XVIII and Title XIX revenue B. Private pay revenue C. HMO and PPO revenue D. Commercial insurer and other revenue E. All of the above Page: 36 True or False 1. It is not uncommon for different plans to pay different contractual rates for the same service. Page: 33 2. If a certain method of grouping revenue for planning and control is generally accepted in other health care facilities, it is not strictly necessary for such a method to be consistent with the current structure of the facility where it is in use. Page: 39 3. When grouping accounts for planning or control, it is permissible to classify revenues by either service line or disease management category. Pages: 37-39 4. Private pay revenue is more prevalent in hospitals than in nursing facilities or assisted living facilities. Page: 36 5. Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are both revenue sources for many health care providers. Page: 35 Short Answer 1. Contractual allowances are the difference between the agreed-upon contractual rate that will be paid and the full __________. Page: 32 2. Revenue flows into the organization (inflow) and is sometimes referred to as the revenue __________. Page: 31 8

I want to done this one before 8 hours. Thank you, Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 2 Multiple Choice 1. The chart of accounts: A. outlines the elements of your company in an organized manner B. maps out account titles with a method of numeric coding C. is designed to compile financial data in a uniform manner that can be de-coded by the user D. all of the above E. (A) and (B) only Page: 15 2. A chart of accounts format can contain: A. 3 items B. 5 items C. 4 items D. any of the above Pages: 15-17 3. Of the four segments that make a healthcare financial system work, which segment provides evidence that an event has occurred? A. The reporting system B. The accounting system C. The original records D. The information system E. Any of the above Page: 11-12 4. Of the four segments that make a healthcare financial system work, which segment gathers evidence that an event has occurred? A. The original records B. The information system C. The accounting system D. The reporting system E. Any of the above Page: 11-12 5. Regarding healthcare financial systems, the knowledgeable manager should be able to: A. Understand that four separate segments of a system exist B. Recognize how the segments fit together within a particular organization C. Recognize where his or her duties fit within these segments D. Be able to make executive decisions concerning a particular segment E. A, B & C F. A, B & D G. A, C & D H. All of the above Page: 11-12 6. When creating a report to communicate financial information, the manager must typically use a standard format that: A. Is used by a healthcare trade organization B. Is accepted in the accounting profession C. Uses terminology that is accepted in your area of the healthcare industry D. A & B E. A & C F. B & C G. All of the above Page: 20 7. When creating a report to communicate financial information, the manager should: A. Organize the body of the report in a logical flow B. Place extensive detail in the body of the report C. Place the executive summary in the appendix D. A & B E. A & C F. B & C G. All of the above Page: 20 8. Of the four segments that make a healthcare financial system work, which segment records evidence that an event has occurred? A. The accounting system B The reporting system C. The original records D. The information system E. Any of the above Page: 11-12 9. Of the four segments that make a healthcare financial system work, which one reports about the effect occurring from an event? A. The original records B. The information system C. The accounting system D. The reporting system E. Any of the above Page: 11-12 10. Within the annual management cycle, raw data: A. Is typically operating information B. Is unadjusted C. Has been adjusted and verified D. A & B E. A & C F. None of the above Page: 19 11. Raw data will typically appear in the organizations: A. Quarterly report B. Annual year-end report C. Quarterly statistics D. A & B E. A & C F. B & C G. None of the above Page: 19-20 12. Quarterly reports: A. Are often used by managers as milestones B. May take the form of a quarterly budget review C. Have been verified but have not yet been balanced D. A & B E. A & C F. B & C G. None of the above Page: 20 13. Interim reports: A. Are generated some time during the organizations reporting period B. Are generated at the end of the organizations reporting period C. Have been verified, adjusted and balanced D. Have been verified and adjusted but not yet balanced E. A & C only F. A & D only G. B & C only H. B & D only Page: 19-20 14. Within the annual management cycle, annual year-end reports will: A. Allow the closing out of the information system so a new cycle can begin with the new year B. Report the end of a specific reporting period Continue the information systems reporting cycle into a new year rather than closing it out C. A & B D. A & C E. B & C F. None of the above Page: 20 15. The primary purpose of annual year-end reports is to report the organizations operations for the period to: A. Outsiders or third parties B. The organizations managers C. Both of the above D. Either of the above Page: 20 16. If the heading on a report reads For the year ended June 30, we can assume that the report covers a: A. Fiscal year B. Full twelve-month period C. Stub period D. A & B E. A & C F. B & C G. None of the above Page: 20 17. If the heading on a report reads For the three-month period ended December 31, we know that the report covers a: A. Fiscal year B. Stub year C. Stub period D. A & B E. A & C F. B & C G. None of the above Page: 20 18. The individual transaction: A. Creates the original record B. Is recorded into a subsidiary journal C. Ends the progress of a transaction information flow D. A & B E. A & C F. B & C G. None of the above Page: 18 19. Actions affecting subsidiary journals include: A. Individual transactions are recorded B. Groups of transactions are gathered and summarized C. Similar transactions are grouped and balanced D. A & B E. A & C F. B & C G. None of the above Page: 18 20. Actions affecting the general ledger include: A. Statements reflecting transactions are created B. Groups of transactions are gathered and summarized C. Adjusted and reviewed transactions for the period are balanced D. A & B E. A & C F. B & C G. None of the above Page: 18 21. All transactions for the period reside in the: A. General ledger B. Cash receipts and cash disbursements journals C. Accounts receivable and accounts payable journals D. A & B E. A & C F. B & C G. None of the above Page: 18 22. Subsidiary journals include the: A. Trial balance B. General ledger C. Payroll journal D. Any of the above E. None of the above Page: 19 23. The text illustrates the information system components for an ambulatory care setting that uses a clinical and financial data repository (both clinical and financial data are fed into the same information system). Links to this system are explained as follows: A. The electronic data information (EDI) link to insurance company databases is a system output -yes B. The electronic data information (EDI) link to insurance company databases is a system input -no C. An automated medical record link provides additional input -yes D. A & C E. B & C F. None of the above Page: 12-13 24. Inputs into the systems ambulatory care setting data repository (as described in the previous question) include the following: A. Scheduling system data B. Outpatient financial information C. Inpatient financial information, if relevant D. Inpatient care plan information, if relevant E. A & B F. A, B & C G. A, B & D H. All of the above Page: 12-13 25. The concept of flowsheets explains and illustrates the flow of: A. Activities B. Accounts receivable C. Accounts payable D. A & B E. A & C F. B & C G. All of the above Page: 13 26. By illustrating information flow, flowsheets answer which of the following questions? A. What is the specific piece of information? B. Who is initially responsible for this piece of information? C. How does the information enter the system? D. All of the above E. None of the above Page: 13 27. When a patient information flowsheet illustrates the flow resulting from deficient data, which of these causes and consequences may apply? A. One cause may be a bad address on the billing statement B. One consequence is that the payer rejects the bill C. Another consequence is that the provider does not receive payment D. A good financial manager may recognize the significance of this flow and correct the cause E. A, B & C F. All of the above Page: 13-14 28. Joseph, an RN in the emergency room of Sample Hospital, begins his Saturday night shift by punching his time card into the machine by the employee entrance. From what you understand about the four segments that make a healthcare system work, where does Josephs time card belong? In the: A. Original records segment B. Information system segment C. Accounting system segment D. Reporting system segment E. None of the above Page: 11 29. Mountain View Nursing Facility uses a chart of accounts format that is made up of three sets of digits. The first set of digits represents the financial statement element, the second is for a primary subclassification and the third is for a secondary subclassification. To which of these three sets of digits would Petty cash for the front office belong? The: A. Financial statement element B. Primary subclassification C. Secondary subclassification D. None of the above C Page: 15 30. In summary, the chart of accounts: ] A. Is a map that the financial manager must and should understand B. Can be infinitely customized for an organizations purposes C. Has generic examples available for reference purposes D. A & B E. A & C F. B & C G. All of the above Page: 15-18 True or False 1. One output from the clinical and financial data repository is insurance verification for patients through an electronic data information link to insurance company databases. Page: 12 2. Of the four segments that make a financial management system work, the reporting system provides evidence that some event has occurred. Page: 11 3. Quarterly reports and statistics are called "interim reports" and generally contain raw data. Page: 19 4. Most organizations have a 12-month reporting period known as a fiscal year. Anything less than a full 12-month year is called a "stub period" and is fully spelled out in the heading of the report. Page: 20 5. Flowsheets are useful because they portray who is responsible for what piece of information as it exits the system. Pages: 13 6. When communicating financial information effectively to others, it is important to place extensive detail within the body of the report. Page: 20 Short Answer 1. Flowsheets illustrate the flow of activities that capture __________. Page: 13 2. The four segments that make a financial system work include the original records, the information system, the accounting system, and the __________ system. Page: 11 3. The books and records of the financial information system for the organization serve to __________. Page: 18 4. All transactions for the period reside in the __________ Page: 18 Multiple Choice 1. The real key to understanding finance is understanding: A. the chief executive officers mission statement B. the elements of finance and their relationship to each other C. the organizations financial analysis software Page: 5 2. Business management as a discipline for educational purposes began in the United States in the: A. 1700s B. 1800s C. 1900s D. None of the above Page: 3 3. Healthcare finance can be described as a method of getting money in and out of the business. Which of these descriptions is correct? A. Getting money in represents revenues B. Getting money out represents expenses C. Getting money in represents outflow D. Getting money out represents inflow E. A & B F. A & C G. B & D H. All of the above Page: 4 4. When healthcare finance is considered a method of getting money in and out of the business, the successful manager is able to achieve the most beneficial outcome by adjusting the inflow and outflow through what actions? A. Organizing B. Controlling C. Decision making D. Planning E. A & B F. B & C G. C & D H. All of the above Ans: H Page: 4 5. The manager with a process viewpoint generally: A. Is responsible for clinical outcomes B. Is responsible for the reporting function of the organization C. Is responsible for data accumulation D. All of the above E. None of the above Ans: C Page: 4 6. The manager with a financial viewpoint generally: A. Works with the system of the organization B. Is responsible for the reporting function of the organization C. May be responsible for service delivery within the organization D. All of the above Ans: B Page: 4 7. The manager with a clinical viewpoint generally: A. May be responsible for service delivery B. May have direct interaction with patients C. Is responsible for clinical outcomes D. All of the above Ans: D Page: 4 8. The healthcare industry is primarily a: A. Manufacturing industry B. Service industry C. Electronic information industry D. Managed care industry E. None of the above Page: 4 9. As part of the history of financial management, who developed the concept of specialization for efficiency? A. Plato B. Socrates C. The Egyptians D. None of the above Page: 3 10. As another part of the history of financial management, who developed a minimum-wage system in 1800 b.c.? A. The Chinese B. The Egyptians and Sumerians C. Hammurabi D. None of the above Page: 3 11. One purpose of planning is to: A. Ensure effective resource use B. Identify objectives C. Make informed choices D. A & B E. A & C F. B & C G. All of the above Page: 5-6 12. Another purpose of planning is to: A. Provide supervision B. Identify ineffective areas C. Identify required steps to accomplish objectives D. A & B E. A & C F. B & C G. All of the above Ans: C Page: 5 13. The purpose of controlling is to: A. Ensure that plans are being followed B. Ensure effective resource use C. Identify objectives D. A & B E. A & C F. B & C G. All of the above Ans: A Page: 5 14. When a financial manager studies current reports and compares them with reports from earlier periods to see if established plans are being followed, these reports are called: A. Subsidiary reports B. The general ledger C. Feedback D. A & B F. B & C G. All of the above Ans: C Page: 5 15. Decision making: A. Involves analysis and evaluation B. Requires making choices among available alternatives C. Relies on information D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 6 16. Deciding how to use the resources of the organization: A. Is the element of financial management called organizing B. Is the element of financial management called directing C. Will result in the most effective way to carry out established plans D. A & B E. A & C F. B & C G. All of the above Page: 5 17. When working on a day-to-day basis, the manager is most likely: A. Keeping the results of organizing running efficiently B. Directing C. Organizing D. A & B E. A & C F. B & C G. All of the above Page: 5 18. Managers who are affiliated with the information system hierarchy in the organization typically operate from a: A. Financial view B. Process view C. Clinical view D. Any of the above E. None of the above Page: 4 19. Managers who perform much of the organizations strategic planning typically operate from a: A. Clinical view B. Process view C. Financial view D. Any of the above E. None of the above Page: 4 20. Accounting primarily intended for outside, or third party, use: A. Is known as financial accounting B. Is known as managerial accounting C. Emphasizes external reporting D. Requires the use of generally accepted accounting principles E. A, C & D F. A & C G B & C H. B, C & D Ans: E Page: 7-9 21. External reporting to third parties in health care (depending upon type of reporting organization) may include reporting to: A. Stockholders B. Government entities C. Health plan payers D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 7 22. Managerial accounting is considered to be: A. Prospective B. Retrospective C. Both prospective and retrospective D. A & B E. A & C F. B & C G. None of the above Ans: C Page: 9 23. Financial reporting primarily deals with: A. Future transactions such as projecting outcomes and preparing budgets B. Transactions that have already occurred C. Both transactions that have already occurred and certain future transactions D. A & B E. A & C F. B & C G. None of the above Page: 7-9 24. Common uses of managerial accounting typically include: A. Pricing of services yes B. Planning and control of operations yes C. Control of performance measures yes D. Reporting service profitability yes E. A, B, C F. B, C, D G. A, C, D H. All of the above Page: 9 25. Within the origins of financial management, who wrote about the universal function of management in human endeavors? A. Plato B. Socrates C. The Sumerians D. None of the above Page: 3 26. The basic types of healthcare organizations may be described as: A. Profit-oriented B. Nonprofit oriented C. Foundations that comply with all legal requirements D. A & B E. A & C F. B & C G. None of the above Page: 6 27. Proprietary entity subgroups include: A. Voluntary entities B. Government entities C. Entities that pay no income tax D. A & B E. A & C F. B & C G. None of the above Page: 6 28. A hospital taxing district and a state university with an affiliated teaching hospital can both be described as: A. Government entities B. Voluntary entities C. Entities that pay no income tax D. Entities that must pay income tax E. A & C F. B & C G. A & D H. B & D Page: 6 29. The purpose of an organization chart includes: A. Indicating how responsibility is assigned to managers B. Illustrating the structure of the organization C. Designating the formal lines of communication among and between external stakeholders D. A & B E. A & C F. B & C G. All of the above Page: 7 30. The composition of an organization chart can be described as follows: A. Each box on the chart represents a particular area of management responsibility B. Each line between the boxes represents a line of authority C. The overall composition of the chart shows the degree of centralization or decentralization within the organization D. A & B E. A & C F. B & C G. All of the above Ans: G Page: 7 True or False 1. Managers within health care organizations must have one of two views: either financial or process. Ans: False Page: 4 2. Much of the strategic planning for the organization is performed by managers with a financial view of the organization. Ans: True Page: 4 3. Management as a discipline for educational purposes did not begin in the United States until after 1900. Ans: False Page: 3 4. The healthcare industrys essential business is the delivery of healthcare services. Ans: True Page: 4 5. Of the four elements of financial management, the planning element makes sure each area of the organization is following the plans that have been established. Ans: False Page: 5 6. Government organization types may include the following: federal; city-county; churches; and/or state universities Page: 6 7. The purpose of an organization chart is to indicate how responsibility is assigned to managers and to certain outside third parties. Page: 7 8. Managerial accounting is primarily for third party or outside use. Page: 9 9. Managerial accounting is prospective as well as retrospective. Page: 9 Short Answer 1. The healthcare industry is a ________ industry. . Page: 4 2. The purpose of one element of financial management is to ensure effective resource use and provide daily supervision. Which element is this? Ans: The organizing and directing element. Page: 5 Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 3 Multiple Choice 1. If a note payable is going to be paid over a three-year period, the liability may be classified as: A. short-term B. long-term C. both short-term and long-term Page: 27 2. Examples of assets include: A. inventory B. land C. accounts receivable D. cash E. all of the above Page: 26 3. The amount owed to vendors: A. Is a liability B. Is recognized as accounts payable C. Is recognized as accounts receivable D. A & B E. A & C F. B & C Page: 27 4. The language of finance includes: Assets, liabilities and net worth English, French and Spanish Books about finance A & B A & C B & C None of the above Page: 25 5. Assets are: A. What the organization owns and/or controls: B. What the organization owes C. Economic resources with expected future benefits D. Economic obligations E. A & C F. A & D G. B & D H. None of the above Page: 25 6. Liabilities are: A. Economic obligations B. What the organization owns C. Debts that are payable D. What the organization owes E. A & C F. B & C G. A, C & D H. None of the above Page: 25 7. Net worth is: A. What the business is worth B. What the business is worth, net of liabilities C. What the business is worth, net of receivables D. None of the above Page: 25 8. An owner has: A. A claim to the entitys assets B. A claim to the entitys liabilities C. Invested in the business D. A & B E. A & C F. B & C G. All of the above Page: 25 9. The term fund balance may be properly used by a: A. Not-for-profit organization B. U.S. governmental entity C. For-profit corporation D. For-profit sole proprietor E. A & B F. C & D G. None of the above Page: 28 10. By their definition not-for-profit organizations should not have equity. A. Correct B. Not correct C. Not applicable to not-for-profits Page: 28 11. If a balance sheet contains the terms capital stock and retained earnings, then we can deduce that the organization is a for-profit: A. Sole proprietor B. Partnership C. Corporation D. None of the above Page: 28 12. All types of business receivables are assets: A. Correct B. Not correct C. Not applicable Page: 26 13. An organizations economic resources include: A. Accounts receivable B. Notes receivable C. Notes payable D. A & B E. A & C F. B & C G. None of the above Page: 26 14. An organizations economic resources may also include: A. Inventory on hand B. Cash on hand C. Buildings D. A & B E. A & C F. B & C G. All of the above Page: 26 15. Liabilities may be called: A. Insider claims B. Outsider claims C. Either of the above D. Neither of the above Page: 25 16. Creditors are those: A. To whom debts are due B. Who hold equity in the organization C. Neither of the above Page: 25 17. The Green Tree Nursing Facility possesses a note receivable in the amount of $12,000. The note will not be paid until Mrs. Jones estate is settled, and her attorneys have informed Green Trees accountant that payment cannot be expected before, at the earliest, eighteen months from now. Consequently the accountant will record this note receivable as a: A. Current, or short-term asset B. Long term asset C. Long term liability D. None of the above Page: 26 18. The Green Tree Nursing Facility possesses another note receivable in the amount of $9,000. This note will be paid in three installments: $3,000 in six months, $3,000 in eighteen months, and the remaining $3,000 in twenty-four months. The accountant will record this note receivable as follows: A. Current, or short-term asset of $9,000 B. Long term asset of $9,000 C. Current asset of $3,000 and long term asset of $6,000 D. Current asset of $6,000 and long term asset of $3,000 E. None of the above Page: 26 19. The accounting equation that reflects a relationship is often described as Assets equal Liabilities plus Net Worth. Is the equation Assets equal Liabilities plus Owners Equity also appropriate and correct? A. Yes B. No C. Dont know Page: 25-26 and 28 20. The accounting equation that reflects a relationship is often described as Assets equal Liabilities plus Net Worth. Can the equation Assets equal Liabilities plus Fund Balance also be correct? A. Yes, if used by the proper organization B. No, it is not appropriate C. Not applicable Page: 25-26 and 28 21. Payroll taxes withheld are: A. A liability B. An asset C. Due to be paid to the government D. A & C E. B & C Page: 27 22. The Horizon Pharmaceutical Company makes quarterly payments of payroll taxes withheld, plus the employers portion of these payroll taxes. Prior to the quarterly payment, should these taxes be recorded as a: A. Current liability B. Short-term liability C. Long term liability D. Current asset E. A & B F. B & C Page: 27 23. Buildings and equipment are typically stated at a net figure called: A. Book value B. Long term value C. Historical value D. None of the above Page: 26-27 24. The original cost, or historical cost, of buildings and equipment is reduced by: A. Accumulated depreciation B. Accumulated liabilities C. Reserve for amortization D. None of the above Page: 26-27 25. A mortgage payable: A. Is recognized as a liability B. Typically has a portion recorded as a short term payable C. Typically has a larger portion recorded as a long term payable D. May be recognized as an other asset E. A & B F. A & C G. A & D H. A, B & C Page: 27 26. At ABC company, if assets equal $50,000 and liabilities equal $30,000, what is the total of liabilities and net worth? A. $20,000 B. $50,000 C. $70,000 D. None of the above Page: 25-26 27. At XYZ corporation, if retained earnings are $10,000 and liabilities are $25,000, what is the total asset amount? A. $35,000 B. $50,000 C. An unknown figure D. None of the above Page: 25-26 28. At the General Care Clinic, if total assets are $100,000 and long term assets are $60,000 and other assets are $10,000 what is the current asset amount? A. $30,000 B. $40,000 C. Neither of the above Page: 25-26 29. Equity is the: A. Money value of property B. Ownership right in property C. Both of the above D. Neither of the above Page: 27-28 30. At the Worth & Williams Clinic, if short-term liabilities are $10,000, long-term liabilities are $70,000, owners equity is $30,000 and current assets are $20,000. What is the total asset figure? A. $100,000 B. $110,000 C. $130,000 D. None of the above Page: 25-26 True or False 1. "Insider claims" are called owner's equity or net worth because these are claims held by owners of the business. Page: 25 2. Liabilities are also called "insider claims". Page: 25 3. The three parts of the accounting equation must always balance among themselves, because that is how they fit together. Page: 26 4. Classification of a note payable liability depends on the length of time that payment is promised. Page: 27 Short Answer 1. A sole proprietorship's or a partnership's net worth may be labeled as __________. Ans: owner's equity Page: 28 2. A corporation will generally report two types of equity accounts: "Capital Stock" and "__________". Ans: retained earnings Page: 28 3. The economic resources that have expected future benefit to the business are called __________. Page: 25 4. The accounting equation that reflects a relationship among three parts can be stated as follows: "Liabilities plus Net Worth equals __________". Pages: 25-26 5. "__________ assets" is another word for short-term assets. Page: 26 6. If an asset cannot be converted into cash within a twelve-month period, it is considered to be a __________ asset. Ans: long-term Page: 26 Health Care Finance: Basic Tools For Nonfinancial Managers, Fourth Edition Baker Test Bank Chapter 4 Multiple Choice 1. Pre-determined per-person payment indicates: A. payment after the service is delivered B. payment before the service is delivered C. either A or B Page: 32 2. Major deductions from revenue include: A. provision for bad debts B. contractual allowance C. charity service D. all of the above Page: 32-33 3. The Medicaid program: A. is funded exclusively by federal funds B. provisions are state specific within broad federal national guidelines C. both of the above Page: 34 4. The Medicare program legislation is contained in: A. Title XIX of the Social Security Act B. Title XVIII of the Social Security Act C. both of the above Page: 33 5. Typical classifications used to group revenue include: A. revenue source B. revenue centers C. care settings D. service lines E. all of the above Pages: 36-38 6. In the case of healthcare, revenue is typically earned by: A. Rendering services to the community B. Rendering services to patients C. Professionals such as physicians D. Organizations such as hospitals Page: 31 7. The term revenue represents: A. Amounts earned by an organization B. Amounts expended by an organization C. The excess of cash remaining after disbursements D. None of the above Page: 31 8. Revenue represents: A. Actual cash inflows B. Expected cash inflows C. Actual cash outflows D. Expected cash outflows E. A & B F. C & D G. None of the above Page: 31 9. Revenue typically represents earned amounts that are: A. Due to the organizations major business B. Due to any business function the organization may perform C. Neither of the above Page: 31 10. Revenues can be received in the form of: A. Cash B. Credit C. Either cash or credit D. None of the above Page: 31 11. Most, though not all, healthcare revenues are received in the form of: A. Cash B. Credit C. Notes receivable D. Exchange of services E. None of the above Page: 31 12. Revenue is typically defined as the value of services rendered, expressed at: A. Established rates net of discounts B. Regional established rates C. Market value D. None of the above Page: 31 13. Assume the following: Greenville Hospitals full established rate for a certain procedure is $200, but the Eastern Health Plans managed care contract pays the hospital only $180 for the procedure. Required: What is the correct recorded revenue figure? A. $180 B. $200 C. $190 D. None of the above Page: 31 14. Charity service is: A. Generally defined as services provided to financially indigent patients B. Represents a major type of deduction from revenue classification C. Both of the above D. Neither of the above Page: 33 15. The Town Center Clinics physician group has contracted with various managed care plans. For visit code 99213, Plan A has contracted to pay $55.00, Plan B has contracted to pay $39.00, and Plan C has contracted to pay $46.00. (These rates are examples only.) The variation in amounts paid by managed care plans for this visit code is: A. Commonly accepted in healthcare today B. Unusual and not a commonly accepted method C. Considered to be a survival method D. None of the above Page: 33 16. Allowance for bad debts: A. Is also known as a provision for doubtful accounts B. Represents a major type of deduction from revenue classification C. Both of the above D. Neither of the above Page: 33 17. Revenue amounts estimated to be uncollectible are: A. Considered to be deductions from revenues B. Are recorded on the organizations books as deductions from revenue C. Considered to be part of the revenue stream D. Are never recorded on the organizations books E. A & B F. C & D Page: 32 18. Contractual allowances: A. Are often for composite services B. Are never for composite services C. Not applicable Page: 32 19. Contractual allowances may be entered on the books of: A. Hospitals B. Physician offices C. Both of the above D. Not applicable Page: 32-33 20. If the full established rate for a procedure is $1,000 and the agreed-upon contractual rate to be paid is $800, then the $200 difference is recorded on the books of the organization as: A. A contractual allowance B. A discount C. Neither of the above Page: 32 21. Whether payment is received before or after service delivery: A. Often influences the amount of liabilities recorded B. Is one way that expenses are classified C. Often influences the amount of revenue received D. Is one way that revenue is classified E. A & B F. C & D G. None of the above Page: 31 22. The traditional payment method in health care is: A. Payment before service is delivered B Payment after contracts are negotiated C. Payment after service is delivered D. None of the above Page: 31 23. Basic types of payment after service is delivered include: A. Fee for service B. Discounted fee for service C. Predetermined per-person payment D. A & B E. A & C F. B & C Page: 32 24. Predetermined per-person payment received: A. Is a payment method after the service is delivered B. Generally consists of an amount received at the agreed-upon rate C. Is typically a per-person count at a particular point in time D. A & B E. A & C F. B & C G. None of the above Page: 32 25. If a contractual agreement to pay for services uses varying assumptions about the group to be served: A. Significant variation in such assumptions will affect the rates that are set for these services B. The use of such group assumptions indicates this is an agreement to pay before service is delivered C. The use of such group assumptions indicates this is an agreement to pay after service is delivered D. A & B E. B & C F. None of the above Page: 32 26. Sources of healthcare revenue in the United States include: A. A variety of public programs B. Private payers C. Certain governmental sources D. All of the above E. None of the above Page: 33 27. Discounted fee for service contracts may include fee schedules. A. Correct B. Not correct C. Not applicable Page: 32 28. Payer mix: A. Represents the various proportions of revenues that are realized from different types of payers B. Is a measure often included in a healthcare organizations profile C. Is called payer mix in part because the sources of healthcare revenue are typically called payers D. All of the above E. None of the above Page: 33 29. Grouping revenue by care settings for planning and control recognizes: A. Different sites at which services are delivered B. Activities that are grouped by responsibility center C. Similar services and groups them into service lines D. The most basic grouping of inpatient versus ambulatory services E. A & B F. B & C G. A & D ] Page: 36-37 30. One method of grouping revenue is by revenue source. Such grouping by revenue source may typically include the following: A. Title XVIII and Title XIX revenue B. Private pay revenue C. HMO and PPO revenue D. Commercial insurer and other revenue E. All of the above Page: 36 True or False 1. It is not uncommon for different plans to pay different contractual rates for the same service. Page: 33 2. If a certain method of grouping revenue for planning and control is generally accepted in other health care facilities, it is not strictly necessary for such a method to be consistent with the current structure of the facility where it is in use. Page: 39 3. When grouping accounts for planning or control, it is permissible to classify revenues by either service line or disease management category. Pages: 37-39 4. Private pay revenue is more prevalent in hospitals than in nursing facilities or assisted living facilities. Page: 36 5. Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are both revenue sources for many health care providers. Page: 35 Short Answer 1. Contractual allowances are the difference between the agreed-upon contractual rate that will be paid and the full __________. Page: 32 2. Revenue flows into the organization (inflow) and is sometimes referred to as the revenue __________. Page: 31 8