Test Your Basic Accounting Knowledge Quiz

21 Questions | Total Attempts: 172

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Accounting Quizzes & Trivia

It is important for any business to have correct books of accounts that reflect a true and fair view of their financial position. There is much that goes into preparing the books of account. Take up quiz below and test your basic accounting knowledge and the terminologies used. All the best!


Questions and Answers
  • 1. 
    Accounts receivable are
    • A. 

      money owed to an organization by vendors    

    • B. 

      money due to the organization from patients and third parties for services already rendered    

    • C. 

      Money an organization is set to receive from investments    

    • D. 

      the financial account in which all monies coming into the organization are placed

  • 2. 
    Which of the following factors set the healthcare industry apart from other industries regarding accounts receivable?
    • A. 

      The cost of services    

    • B. 

      The method of payment for services    

    • C. 

      The utilization of services    

    • D. 

      (a) and (b)    

  • 3. 
    What is the primary source of data required for reimbursement from third parties?
    • A. 

      The medical record    

    • B. 

      The medical claim form    

    • C. 

      The fee schedule    

    • D. 

      None of the above    

  • 4. 
    An organization incurs carrying costs
    • A. 

      For billing and collecting during the organization's average payment cycle    

    • B. 

      when patients do not pay on time    

    • C. 

      when it extends credit to patients after providing services    

    • D. 

      due to excess funds in accounts receivable    

  • 5. 
    An organization incurs credit-and-collection costs
    • A. 

      due to excess funds in accounts receivable    

    • B. 

      for billing and collecting during the organization's average payment cycle    

    • C. 

      when patients do not pay on time    

    • D. 

      When it extends credit to patients after providing services

  • 6. 
    An organization incurs delinquency costs
    • A. 

      When patients do not pay on time    

    • B. 

      when it extends credit to patients after providing services    

    • C. 

      due to excess funds in accounts receivable    

    • D. 

      Billing and collecting during the organization's average payment cycle    

  • 7. 
    The objective of revenue cycle management is to
    • A. 

      Ensure that payments for services are received from third parties    

    • B. 

      maintain strict control over an organization's cash flows    

    • C. 

      ensure that patients and third parties pay claims    

    • D. 

      reduce the collection period    

  • 8. 
    Which of the following is an advantage of having an internal control system?
    • A. 

      It gives employees direction through policies and procedures.    

    • B. 

      It reduces the risk of losing assets through errors.    

    • C. 

      (a) and (b)    

    • D. 

      None of the above

  • 9. 
    A coding compliance plan should ensure
    • A. 

      that an organization is using the right coding resources    

    • B. 

      that the HIM department is conducting periodic training for all coders    

    • C. 

      Continuous development and revision of coding policies    

    • D. 

      all of the above    

  • 10. 
    When an organization pledges its accounts receivable, the organization
    • A. 

      Uses its receivables as collateral for a loan    

    • B. 

      Converge

    • C. 

      sells its receivables to a bank or other agency at a discount    

    • D. 

      Diverge

    • E. 

      Promises to use its outstanding accounts receivable for charitable purposes    

    • F. 

      invests its accounts receivable in the expansion of the organization    

  • 11. 
    Financial counseling for self-pay patients should include all of the following except
    • A. 

      consideration of alternative payment options    

    • B. 

      Converge

    • C. 

      assistance in setting up a credit card to pay their bills    

    • D. 

      Diverge

    • E. 

      Information about the organization's credit and collections policies    

    • F. 

      Investigation of patients’ credit histories to determine to what extent patients can pay their bills

  • 12. 
    An organization's credit and collection policies address which of the following issues?
    • A. 

      Charity care, bad debt, and self-pay    

    • B. 

      Billing procedures    

    • C. 

      (a) and (b)    

    • D. 

      Llection agency policies    

  • 13. 
    Which of the following is a reason why a hospital may not always collect money due at the time of service?
    • A. 

      Hospital policy does not allow money to the collected at the time of service.    

    • B. 

      Collection of money at the time of service may be considered poor public relations.    

    • C. 

      The total amount of money owed may not be known at the time of service.    

    • D. 

      All of the above

  • 14. 
    When an organization uses a lock box procedure for depositing payments
    • A. 

      payers mail payments directly to a bank, which deposits the money    

    • B. 

      payments are wired directly to a bank    

    • C. 

      The organization stores payments in a locked box until they are sent to a bank for deposit    

    • D. 

      payments are directly deposited into an organization’s secure account

  • 15. 
    Financing accounts receivable involves
    • A. 

      using excess accounts receivable funds for community benefit    

    • B. 

      Converting outstanding accounts receivable into cash for short-term obligations    

    • C. 

      Converting outstanding accounts receivable into cash for long-term investments    

    • D. 

      Using excess accounts receivable funds for investment in capital equipment

  • 16. 
    When an organization factors its accounts receivables, the organization
    • A. 

      itemizes the portion of its outstanding accounts receivable that will be used for short-term investments    

    • B. 

      Es its receivables as collateral for a loan    

    • C. 

      sells its receivables to a bank or other agency at a discount    

    • D. 

      considers factors outside the organization that may affect its accounts receivable    

  • 17. 
    Which federal law governing accounts receivable applies only to third-party payers?
    • A. 

      Truth in Lending Act    

    • B. 

      Fair Credit Reporting Act    

    • C. 

      (a) and (b)    

    • D. 

      Fair Debt Collection Practices Act    

  • 18. 
    Which federal law governing accounts receivable applies only to third-party payers?
    • A. 

      Truth in Lending Act    

    • B. 

      Fair Credit Reporting Act    

    • C. 

      (a) and (b)    

    • D. 

      Fair Debt Collection Practices Act    

  • 19. 
    The Fair Credit Reporting Act
    • A. 

      Establishes disclosure rules for sales involving consumer credit    

    • B. 

      Applies only if an organization contracts with a collection agency    

    • C. 

      governs the use of credit reports    

    • D. 

      Establishes provisions for reporting individuals’ credit in good f

  • 20. 
    The Truth in Lending Act
    • A. 

      governs the use of credit reports    

    • B. 

      Establishes disclosure rules for sales involving consumer credit    

    • C. 

      Plies only if an organization contracts with a collection agency    

    • D. 

      establishes provisions for lending funds in good faith to organizations    

  • 21. 
    The average collection period ratio measures
    • A. 

      the average amount of time an organization takes to collect a bill    

    • B. 

      average number of days that pass before a bill is sent to a collection agency    

    • C. 

      The number of days an organization is permitted to seek payment for services from patients or third parties    

    • D. 

      none of the above

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