In general, the ownership patterns for U.S. nursing facilities in 2008 ____.

Varied widely from state to state

Were unchanged from 89 years earlier

Generating reports on the financial standing of the nursing facility is generally assigned to ____.

The chief financial officer (CFO)

Responsibility and blame for overspending in the department of nursing and in food services is typically assigned by the owners to the ____.

Director of nursing and director of food services

Director of nursing and the dietitian

The primary purpose of the Generally Accepted Accounting Principles is to ____.

Maximize comparability of financial statements of different organizations

Guarantee honesty among providers

Maximize comparability of financial statements of different organizations

Create a single view among financial managers

A summary of the nursing home's financial well-being within a time period is normally referred to as ____.

Notes to changes in financial condition

If the administrator asks the accountant for the journals, the administrator wants to look at ____.

Current summaries of income and outgo

The new accountant informs the administrator that to simplify things, he has incorporated all purchases that will be paid for the next few years into the accounts payable journal. The administrator should ____.

Begin a search for a new accountant

Ask for last year's books to be conformed to the new system

Begin a search for a new accountant

As that these purchases be transferred to the general journal

Under double-entry bookkeeping, when a bill is sent to Ms. Jones for $3,000 for the past month's care, the bookkeeper would normally record $3,000 in the debit column as an increase in assets and ____.

Record $3,000 on the credit side as an increase in revenue

Wait for the payment before entering further data

Enter an estimate of when the bill will be paid

Nursing Home Administration - Finance And Business Quiz

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Nursing Home Administration - Finance And Business Quiz - Quiz

Learning to manage the organization's finances

Questions and Answers

1.

The staff person responsible for assuring that the business office runs smoothly is, in the final analysis, ____.
- A.
  
  Corporate finance director
- B.
  
  The administrator
- C.
  
  Business office staff
- D.
  
  Facility treasurer
Correct Answer
B. The administrator

Explanation
The administrator is responsible for ensuring that the business office runs smoothly. They oversee and manage the day-to-day operations, coordinate with staff members, and make decisions to maintain efficiency and effectiveness. They play a crucial role in maintaining the overall functioning of the business office and ensuring that all tasks and responsibilities are carried out smoothly.

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2.

In general, the ownership patterns for U.S. nursing facilities in 2008 ____.
- A.
  
  Were unstable
- B.
  
  Varied widely from state to state
- C.
  
  Were somewhat stable
- D.
  
  Were unchanged from 89 years earlier
Correct Answer
C. Were somewhat stable

Explanation
The correct answer is "Were somewhat stable." This means that the ownership patterns for U.S. nursing facilities in 2008 were not completely stable, but they also were not highly unstable. There may have been some changes or variations in ownership, but overall, there was a degree of stability in the ownership patterns during that time.

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3.

Generating reports on the financial standing of the nursing facility is generally assigned to ____.
- A.
  
  The accountant
- B.
  
  The director of financial
- C.
  
  The administrative assistant
- D.
  
  The chief financial officer (CFO)
Correct Answer
A. The accountant

Explanation
The accountant is responsible for generating reports on the financial standing of the nursing facility. As a financial professional, the accountant has the necessary skills and knowledge to compile and analyze financial data, prepare financial statements, and generate reports that provide an accurate and comprehensive overview of the facility's financial performance. This role requires expertise in accounting principles, financial analysis, and report preparation, making the accountant the most suitable person for this task. The director of financial, administrative assistant, and chief financial officer may have other responsibilities related to financial management but are not specifically assigned to generate reports.

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4.

Responsibility and blame for overspending in the department of nursing and in food services is typically assigned by the owners to the ____.
- A.
  
  Director of nursing and director of food services
- B.
  
  Director of nursing and the dietitian
- C.
  
  Chief financial officer
- D.
  
  Administrator
Correct Answer
D. Administrator

Explanation
The responsibility and blame for overspending in the department of nursing and in food services is typically assigned by the owners to the administrator. The administrator is the person who is in charge of managing and overseeing the overall operations of the organization. They are responsible for making financial decisions and ensuring that the budget is properly allocated. Therefore, it is logical for the owners to hold the administrator accountable for any overspending in these departments.

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5.

A set of records that lists each monetary transaction of the facility is normally referred to as ____.
- A.
  
  The books
- B.
  
  Financial statements
- C.
  
  Monetary records
- D.
  
  Income and revenue statement
Correct Answer
A. The books

Explanation
The term "the books" is commonly used to refer to a set of records that lists each monetary transaction of a facility. It is a widely accepted term in accounting and finance to describe the comprehensive record-keeping system that tracks the financial activities of an organization. The books include all the necessary information to prepare financial statements and analyze the financial health of the facility.

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6.

The primary purpose of the Generally Accepted Accounting Principles is to ____.
- A.
  
  Guarantee honesty among providers
- B.
  
  Maximize comparability of financial statements of different organizations
- C.
  
  Create a single view among financial managers
- D.
  
  Protect the owners
Correct Answer
B. Maximize comparability of financial statements of different organizations

Explanation
The primary purpose of the Generally Accepted Accounting Principles (GAAP) is to maximize comparability of financial statements of different organizations. GAAP provides a set of standard guidelines and principles that ensure consistency and uniformity in financial reporting. This allows for easier comparison of financial statements between different organizations, enabling stakeholders to make informed decisions and analyze the financial performance of companies more effectively. By promoting comparability, GAAP enhances transparency and trust in financial reporting, benefiting investors, creditors, and other users of financial statements.

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7.

An owner who takes unrecorded cash from the facility daily cash intake to purchase a laptop for his daughter to use at college has violated the ____ concept.
- A.
  
  Consistency
- B.
  
  Entity
- C.
  
  Time period
- D.
  
  Objective evidence
Correct Answer
B. Entity

Explanation
The owner's action of taking unrecorded cash from the facility's daily cash intake for personal use violates the entity concept. The entity concept states that the business and its owner are separate entities, and the owner should not mix personal and business finances. By using the cash for personal purposes, the owner is disregarding this concept and treating the business's assets as their own.

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8.

Instructing the financial manager to record assets at current market value and to not record patient bills expected to become uncollectible violates the ____ concept.
- A.
  
  Entity
- B.
  
  Good faith
- C.
  
  Time period
- D.
  
  Consistency
Correct Answer
D. Consistency

Explanation
The concept of consistency in accounting states that financial information should be recorded and reported in a consistent manner over time. In this case, instructing the financial manager to record assets at current market value and not record patient bills expected to become uncollectible would result in a violation of consistency. This is because the financial manager is deviating from the usual and consistent practice of recording assets at their historical cost and recognizing potential bad debts.

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9.

Telling the accountant not to record overtime paid from the cash box to employees working weekends is violating the ____ concept.
- A.
  
  Ongoing concern
- B.
  
  Entity
- C.
  
  Full disclosure
- D.
  
  Time period
Correct Answer
C. Full disclosure

Explanation
The concept of full disclosure requires that all relevant and material information be disclosed in the financial statements. In this scenario, instructing the accountant not to record overtime paid from the cash box to employees working weekends is a violation of the full disclosure concept because it hides important information about the company's expenses and payments to employees. By not disclosing this information, the financial statements would not provide a complete and accurate representation of the company's financial position and performance.

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10.

Directing the accountant to move from a January 1 date to a June 30 fiscal year date in order to minimize the negative image possibly created by an anticipated loss violates the ____ concept.
- A.
  
  Ongoing concern
- B.
  
  Time period
- C.
  
  Conservation
- D.
  
  Entity
Correct Answer
B. Time period

Explanation
The concept of time period in accounting refers to the practice of dividing the financial information into specific periods, such as months, quarters, or years, in order to provide timely and relevant information to users. In this scenario, directing the accountant to change the fiscal year from January 1 to June 30 is a violation of the time period concept because it disrupts the consistency and comparability of financial information. This change may be aimed at minimizing the negative image caused by an anticipated loss, but it compromises the accuracy and reliability of financial reporting.

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11.

Allowing the bookkeeper to destroy vouchers showing payments made for meals to employees once these are recorded may violate the ___ concept.
- A.
  
  Objective evidence
- B.
  
  Consistency
- C.
  
  Time period
- D.
  
  Entity
Correct Answer
A. Objective evidence

Explanation
Allowing the bookkeeper to destroy vouchers showing payments made for meals to employees once these are recorded may violate the objective evidence concept. This concept requires that financial transactions be supported by verifiable and reliable documentation. By destroying the vouchers, there would be no tangible evidence to support the payments made for meals to employees, which could lead to a lack of transparency and accuracy in the financial records.

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12.

Pieces of paper indicating money owed to or by the facility, bank statements, and similar pieces of paper or its electronic equivalent are known as ____.
- A.
  
  Paper trail
- B.
  
  Source documents
- C.
  
  Bill of lading
- D.
  
  Records
Correct Answer
B. Source documents

Explanation
Source documents are pieces of paper or electronic records that indicate money owed to or by a facility, such as bank statements or invoices. They provide evidence of transactions and serve as a paper trail for financial records. Therefore, the correct answer is source documents.

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13.

An administrator who instructs the accountant to begin reporting facility finances by recording all expenditures and all receipts as they actually occur has decided to use the ____ system of accounting.
- A.
  
  Cash
- B.
  
  Implied
- C.
  
  No-fault
- D.
  
  Accrual
Correct Answer
A. Cash

Explanation
The administrator's decision to record all expenditures and receipts as they actually occur indicates that they are using the cash system of accounting. In this system, transactions are recognized and recorded when cash is received or paid out. This method provides a clear and immediate picture of the organization's cash flow and is commonly used by small businesses or those with simple financial transactions.

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14.

It is difficult to recognize items such as depreciation and prepaid insurance in the ____ system of accounting.
- A.
  
  Accrual
- B.
  
  Simplified
- C.
  
  Cash
- D.
  
  Income and expense
Correct Answer
C. Cash

Explanation
In a cash system of accounting, only transactions involving actual cash inflows and outflows are recorded. Items such as depreciation and prepaid insurance are not recognized in this system because they do not involve immediate cash transactions. Depreciation is the allocation of the cost of an asset over its useful life, and prepaid insurance represents an advance payment for future coverage. These items are typically recognized in accrual accounting, where transactions are recorded when they occur, regardless of cash flow. Therefore, it is difficult to recognize depreciation and prepaid insurance in a cash system of accounting.

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15.

An administrator directing the accountant to record revenues when they are earned and expenses when they are incurred by matching revenues and expenses for each time period is the advantage of the ____ system of accounting.
- A.
  
  Accrual
- B.
  
  Cash
- C.
  
  Simplified
- D.
  
  Advanced
Correct Answer
A. Accrual

Explanation
The advantage of the accrual system of accounting is that it allows the recording of revenues when they are earned and expenses when they are incurred. This ensures that revenues and expenses are matched for each time period, providing a more accurate representation of the financial position and performance of a business. The accrual system recognizes that even if cash has not been received or paid, transactions still impact the financial statements. This method provides a more comprehensive view of a company's financial activities and allows for better decision-making.

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16.

Allowing the facility to accurately measure revenues earned after expenses have been paid or losses incurred by matching revenues and expenses for each time period is the advantage of the ____ system of accounting.
- A.
  
  Acccrual
- B.
  
  Cash
- C.
  
  Income and loss
- D.
  
  Advanced electronic
Correct Answer
A. Acccrual

Explanation
The accrual system of accounting allows for the accurate measurement of revenues earned after expenses have been paid or losses incurred by matching revenues and expenses for each time period. This means that revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid. This provides a more accurate representation of the financial performance of a business over a specific period of time.

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17.

A summary of the nursing home's financial well-being within a time period is normally referred to as ____.
- A.
  
  The financial statements
- B.
  
  Profit and loss
- C.
  
  Notes to changes in financial condition
- D.
  
  Statements of change
Correct Answer
A. The financial statements

Explanation
The financial statements provide a summary of the nursing home's financial well-being within a specific time period. These statements include information such as the balance sheet, income statement, and cash flow statement, which help to assess the financial health and performance of the nursing home. By analyzing these statements, stakeholders can evaluate the organization's profitability, liquidity, and overall financial condition.

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18.

If the administrator asked the bookkeeper for a list containing every account in the facility, the bookkeeper would hand the administrator the ____.
- A.
  
  Books
- B.
  
  Financial Report
- C.
  
  Chart of accounts
- D.
  
  General journal
Correct Answer
C. Chart of accounts

Explanation
The correct answer is "Chart of accounts." A chart of accounts is a comprehensive list of all the accounts used by a company or organization to record financial transactions. It provides a systematic and organized structure for categorizing and classifying various accounts, such as assets, liabilities, equity, revenue, and expenses. By providing this list to the administrator, the bookkeeper would be giving them a complete overview of all the accounts in the facility.

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19.

Things owned by the facility are normally referred to as ____.
- A.
  
  Debentures
- B.
  
  Assets
- C.
  
  Possessions
- D.
  
  Tangibles
Correct Answer
B. Assets

Explanation
Assets are things owned by a facility or organization. They can include tangible items such as property, equipment, and inventory, as well as intangible items such as patents, trademarks, and intellectual property. Assets are recorded on a company's balance sheet and are an important part of its financial health and value.

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20.

Things owed by the facility, its obligations, are normally referred to as ____.
- A.
  
  Capital
- B.
  
  Unpaid bills
- C.
  
  Invoices
- D.
  
  Liabilities
Correct Answer
D. Liabilities

Explanation
Liabilities are the things owed by a facility, such as debts, obligations, or financial responsibilities. This can include unpaid bills, invoices, loans, or any other financial commitments that the facility needs to fulfill. Liabilities are an important aspect of a facility's financial health and are typically recorded on the balance sheet.

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21.

Money invested in the facility, also known as the facility's net worth, is normally referred to as ____.
- A.
  
  Stock
- B.
  
  Collateral
- C.
  
  Capital
- D.
  
  Income stream
Correct Answer
C. Capital

Explanation
Money invested in a facility, also known as the facility's net worth, is referred to as capital. Capital represents the financial resources that a facility has available for investment, expansion, or other business activities. It includes both the initial investment and any additional funds that have been invested in the facility over time. Capital is a crucial component for businesses as it enables them to purchase assets, cover operational expenses, and generate income.

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22.

If the administrator asks the accountant for the journals, the administrator wants to look at ____.
- A.
  
  The original entries
- B.
  
  The assets
- C.
  
  The debits
- D.
  
  Current summaries of income and outgo
Correct Answer
A. The original entries

Explanation
If the administrator asks the accountant for the journals, it means that the administrator wants to examine the original entries. Journals are used to record all financial transactions in chronological order, including debits and credits. By reviewing the journals, the administrator can gain a comprehensive understanding of the financial activities and ensure accuracy in the accounting records.

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23.

The new accountant informs the administrator that to simplify things, he has incorporated all purchases that will be paid for the next few years into the accounts payable journal. The administrator should ____.
- A.
  
  Compliment the accountant
- B.
  
  Ask for last year's books to be conformed to the new system
- C.
  
  Begin a search for a new accountant
- D.
  
  As that these purchases be transferred to the general journal
Correct Answer
C. Begin a search for a new accountant

Explanation
The new accountant's action of incorporating all purchases that will be paid for the next few years into the accounts payable journal indicates a lack of understanding of proper accounting practices. This action can lead to inaccurate financial statements and misrepresentation of the company's financial position. Therefore, the administrator should begin a search for a new accountant who has a better understanding of accounting principles and can ensure accurate financial record-keeping.

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24.

Making a debit and a credit entry for each transaction is known as the ____ system of accounting.
- A.
  
  Single/double
- B.
  
  Systematic
- C.
  
  Alternate
- D.
  
  Double-entry
Correct Answer
D. Double-entry

Explanation
The correct answer is "Double-entry" because this system of accounting requires recording both a debit and a credit entry for each transaction. This method ensures that the accounting equation (assets = liabilities + equity) is maintained and provides a more accurate representation of the financial transactions. It allows for better tracking of financial activities and helps in identifying errors or discrepancies in the accounts.

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25.

Under double-entry bookkeeping, when a bill is sent to Ms. Jones for $3,000 for the past month's care, the bookkeeper would normally record $3,000 in the debit column as an increase in assets and ____.
- A.
  
  Record $3,000 on the credit side as an increase in revenue
- B.
  
  Record $3,000 as received
- C.
  
  Wait for the payment before entering further data
- D.
  
  Enter an estimate of when the bill will be paid
Correct Answer
A. Record $3,000 on the credit side as an increase in revenue

Explanation
When a bill is sent to Ms. Jones for $3,000 for the past month's care, the bookkeeper would normally record $3,000 on the credit side as an increase in revenue. This is because revenue is recorded on the credit side in double-entry bookkeeping to reflect an increase in income or earnings. By recording the $3,000 as revenue, the bookkeeper acknowledges the amount earned from providing care to Ms. Jones and properly reflects it in the financial records.

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26.

Using accrual accounting, purchase of a 6-month supply of provisions would be entered into the ____.
- A.
  
  Billings journal
- B.
  
  Cash receipts journal
- C.
  
  General journal
- D.
  
  Credit side of the ledger
Correct Answer
C. General journal

Explanation
In accrual accounting, the purchase of a 6-month supply of provisions would be entered into the general journal. The general journal is used to record all types of transactions, including purchases, sales, expenses, and other financial activities. It serves as a central record-keeping tool for all financial transactions and provides a complete and chronological overview of the company's financial activities. Therefore, entering the purchase of provisions in the general journal ensures that it is accurately recorded and included in the company's financial statements.

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27.

Under accrual accounting, when the accountant shows the amount of medical supplies used during a month in the cash disbursements journal and the general journal the bookkeeper has made ____.
- A.
  
  A mistake
- B.
  
  An adjusting entry
- C.
  
  An inappropriate entry
- D.
  
  A good accounting judgement
Correct Answer
B. An adjusting entry

Explanation
Under accrual accounting, the accountant shows the amount of medical supplies used during a month in the adjusting entry. This is because under accrual accounting, expenses are recognized when they are incurred, regardless of when the cash is actually paid. Therefore, the entry to record the amount of medical supplies used would be an adjusting entry, which ensures that the financial statements accurately reflect the expenses incurred during the period.

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28.

When errors are discovered in other journals, they can be corrected by entries into the ____.
- A.
  
  Support records
- B.
  
  Ledger
- C.
  
  Cash receipts journal
- D.
  
  General journal
Correct Answer
D. General journal

Explanation
When errors are discovered in other journals, they can be corrected by entries into the general journal. The general journal is a book of original entry where all transactions are recorded in chronological order. It is used to correct errors or make adjustments that cannot be made in the original journal. By making entries in the general journal, the errors can be rectified and the financial records can be accurately updated.

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29.

When the administrator asks the accountant for a summary of all debits and credits contained in the journals for the time period, the accountant should had the ____ to the administrator.
- A.
  
  General journal
- B.
  
  General ledger
- C.
  
  Financial statements
- D.
  
  Debits and credits listing
Correct Answer
B. General ledger

Explanation
The general ledger is the appropriate document for the accountant to provide to the administrator when asked for a summary of all debits and credits contained in the journals for the time period. The general ledger contains all the accounts and their respective debits and credits, providing a comprehensive overview of the financial transactions. It is a primary tool for financial reporting and analysis.

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30.

At the end of a time period, when debits do not match credits exactly, the accountant can first assume an error has been made in ___.
- A.
  
  Recording transactions
- B.
  
  Entering debits
- C.
  
  Entering credits
- D.
  
  Source documents
Correct Answer
A. Recording transactions

Explanation
The correct answer is "Recording transactions" because if the debits and credits do not match exactly at the end of a time period, it suggests that there may have been errors in the recording of transactions. This could mean that some transactions were not recorded at all, or that they were recorded incorrectly, resulting in an imbalance between debits and credits. By assuming an error in recording transactions, the accountant can then investigate and correct any mistakes that may have occurred.

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31.

The GAAPS's do not normally require financial statements prepared for general distribution to include ____.
- A.
  
  Income statement, or profit/loss statement
- B.
  
  Balance sheet, or statement of financial position
- C.
  
  Statement of changes in financial position
- D.
  
  Chart of accounts
Correct Answer
D. Chart of accounts

Explanation
The GAAPs, or Generally Accepted Accounting Principles, provide guidelines for financial reporting. One of the main components of financial statements is the chart of accounts, which lists all the accounts used by a company to record its financial transactions. However, the GAAPs do not require financial statements prepared for general distribution to include the chart of accounts. The chart of accounts is typically used internally by the company's accounting department and may not be relevant or necessary for external users of the financial statements.

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32.

The income statement shows whether ____ were sufficient to cover expenses.
- A.
  
  Charges
- B.
  
  Revenues
- C.
  
  Debts
- D.
  
  Retained Earnings
Correct Answer
B. Revenues

Explanation
The income statement shows whether revenues were sufficient to cover expenses. The income statement is a financial statement that summarizes a company's revenues, expenses, and net income or loss for a specific period. Revenues represent the income generated from the primary activities of the business, such as sales of goods or services. By comparing revenues to expenses, the income statement provides insight into the profitability of the company and whether it was able to generate enough revenue to cover its expenses.

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33.

The accountant has listed the new building annex, the new central air conditioning system, and the supplies for the next 6 months as capital expenses. The administrator should.
- A.
  
  Be pleased with the decision
- B.
  
  Forward the report to corporate headquarters
- C.
  
  Rewrite the report
- D.
  
  Look for a new accountant
Correct Answer
D. Look for a new accountant

Explanation
The correct answer is "Look for a new accountant." The reason for this is that capital expenses are typically long-term investments that benefit the company over a period of time, such as the new building annex. However, the central air conditioning system and supplies for the next 6 months are not considered capital expenses as they are short-term in nature and do not provide long-term benefits. Therefore, the accountant has made an error in categorizing these items as capital expenses, indicating a lack of understanding or knowledge in accounting principles. Hence, the administrator should consider finding a new accountant who has a better understanding of accounting principles.

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34.

At the end of a time period, total expenses are subtracted from total revenues to compute the ____.
- A.
  
  Net income, or profit or loss
- B.
  
  Approximate income
- C.
  
  Adjusted income margin
- D.
  
  Operating income
Correct Answer
A. Net income, or profit or loss

Explanation
At the end of a time period, the calculation of net income, or profit or loss, involves subtracting total expenses from total revenues. This calculation helps determine the overall financial performance of a business during that period. Net income represents the amount of money that remains after all expenses have been deducted from revenues, indicating whether the company has made a profit or incurred a loss.

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35.

The accountant, upon successfully bringing the expense and revenue accounts to zero, has successfully ____.
- A.
  
  Calculated profit
- B.
  
  Calculated losses
- C.
  
  Closed the books
- D.
  
  Completed the financial statements
Correct Answer
C. Closed the books

Explanation
When the accountant brings the expense and revenue accounts to zero, it means that all expenses and revenues have been properly recorded and accounted for. Closing the books refers to the process of finalizing the accounting records for a specific period, typically at the end of the financial year. By closing the books, the accountant ensures that all transactions have been accurately recorded, allowing for the preparation of accurate financial statements such as the income statement and balance sheet. Therefore, the correct answer is "Closed the books."

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36.

When the administrator asks the chief financial officer for a statement showing the ending balance of the revenue and expenses accounts, the CFO should hand the ____ to the administrator.
- A.
  
  Income statement
- B.
  
  Balance sheet
- C.
  
  General ledger
- D.
  
  General journal
Correct Answer
A. Income statement

Explanation
The correct answer is the income statement. The income statement shows the revenue and expenses accounts and provides information about the company's financial performance over a specific period of time. It helps the administrator understand the ending balance of these accounts and assess the profitability of the company. The balance sheet, on the other hand, provides a snapshot of the company's financial position at a specific point in time. The general ledger and general journal are accounting records used to track and record financial transactions, but they do not provide the ending balance of revenue and expenses accounts specifically.

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37.

A financial statement in which the assets must equal the liability and capital accounts is known as the ____.
- A.
  
  Ending statement
- B.
  
  Final statement
- C.
  
  Balance sheet
- D.
  
  Financial statement
Correct Answer
C. Balance sheet

Explanation
A balance sheet is a financial statement that presents a company's financial position at a specific point in time. It shows the company's assets (what it owns), liabilities (what it owes), and capital accounts (the owner's equity or investment in the business). The balance sheet follows the fundamental accounting equation, which states that assets must equal liabilities plus capital. Therefore, a balance sheet is the correct answer as it accurately describes a financial statement where the assets must equal the liability and capital accounts.

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38.

Any possession of the facility which will be or could be turned into cash within 12 months is a ____.
- A.
  
  Noncurrent asset
- B.
  
  Current asset
- C.
  
  Benefit
- D.
  
  Positive asset
Correct Answer
B. Current asset

Explanation
A current asset refers to any possession of a facility that can be converted into cash within a period of 12 months. This includes assets such as cash, accounts receivable, inventory, and short-term investments. These assets are expected to be utilized or sold within a year and are essential for the day-to-day operations of a business. Therefore, the correct answer is current asset.

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39.

The concept that, since capital assets will not be liquidated any time soon, their current market value is not directly relevant, relates to the ongoing concern concept and is known as ____.
- A.
  
  Historic cost
- B.
  
  Current cost
- C.
  
  Original cost
- D.
  
  Projected Value
Correct Answer
A. Historic cost

Explanation
The concept that the current market value of capital assets is not directly relevant because they are not going to be sold or liquidated in the near future is known as historic cost. Historic cost refers to the original cost of acquiring the asset, which is recorded on the balance sheet and does not change over time, regardless of any fluctuations in the market value. This concept is based on the assumption that the company will continue to operate as an ongoing concern and the assets will be used for their intended purpose rather than being sold for profit.

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40.

Depreciation is an expense associated with the use of ____.
- A.
  
  A purchase
- B.
  
  An asset
- C.
  
  Land
- D.
  
  A specified purchase
Correct Answer
B. An asset

Explanation
Depreciation is an expense associated with the use of an asset. When an asset is used over time, it gradually loses its value due to wear and tear, obsolescence, or other factors. Depreciation is a way to allocate the cost of the asset over its useful life. By recognizing depreciation as an expense, businesses can accurately reflect the reduction in value of their assets on their financial statements. Therefore, the correct answer is "An asset."

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41.

Bills from suppliers of foodstuffs or office supplies, or janitorial services contractors are normally classified as among the ____.
- A.
  
  Current liabilities
- B.
  
  Accounts due
- C.
  
  Invoices
- D.
  
  Bills of lading
Correct Answer
A. Current liabilities

Explanation
Bills from suppliers of foodstuffs or office supplies, or janitorial services contractors are normally classified as current liabilities because they represent debts that are expected to be paid within a short period of time, usually within one year. Current liabilities are obligations that a company owes and must settle in the near future, typically through the use of current assets or by incurring new liabilities. Therefore, bills from suppliers and contractors fall under this category as they are expected to be paid off in the short term.

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42.

When an administrator notes that there are $600,000 in notes payable on the financial reports, she knows these must be paid within ____.
- A.
  
  6 months
- B.
  
  1 year
- C.
  
  1 month
- D.
  
  90 days
Correct Answer
B. 1 year

Explanation
The administrator notes that there are $600,000 in notes payable on the financial reports. Notes payable are a type of short-term liability that a company owes to its creditors. They represent the amount of money that the company needs to repay within a specific period. In this case, since the administrator knows that the notes payable are $600,000, it indicates that these debts must be paid within a longer time frame. The only option that aligns with this is 1 year, as it represents a longer period compared to the other options provided (6 months, 1 month, and 90 days).

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43.

Funds that have been put into the facility by owners or others, and retained earnings that have been put back into the facility are usually included when calculating the ____.
- A.
  
  Net worth
- B.
  
  Bottom line
- C.
  
  Final value
- D.
  
  Financial liabilities
Correct Answer
A. Net worth

Explanation
When calculating net worth, funds that have been invested into the facility by owners or others, as well as retained earnings that have been reinvested into the facility, are typically included. Net worth represents the total value of assets minus liabilities and reflects the overall financial health and value of the facility.

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44.

If the administrator asks the accountant for a statement analyzing the financial position of the facility at the beginning of the fiscal year, the best statement to hand the administrator is the ____.
- A.
  
  Statement of profit and loss
- B.
  
  Statement of net worth
- C.
  
  Balance sheet
- D.
  
  General ledger
Correct Answer
C. Balance sheet

Explanation
A balance sheet provides a snapshot of a company's financial position at a specific point in time, typically at the beginning or end of a fiscal year. It includes information about the company's assets, liabilities, and shareholders' equity. By handing the administrator a balance sheet, the accountant can provide a comprehensive overview of the facility's financial health and its ability to meet its financial obligations. This statement is more appropriate for analyzing the financial position of the facility compared to the other options provided.

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45.

The certified public accountant's end of year report for a 15-year old, 120-bed for-profit facility with no debt shows an excess of income over expenses of $95,000. The owners would likely be ____.
- A.
  
  Very pleased with the facility performance
- B.
  
  Very displeased with the facility performance
- C.
  
  Generally satisfied
- D.
  
  Neutral
Correct Answer
B. Very displeased with the facility performance

Explanation
The owners would likely be very displeased with the facility performance because even though the facility has no debt and a 15-year history, the excess of income over expenses is only $95,000. This amount may be considered low for a 120-bed for-profit facility, indicating that the facility may not be generating enough revenue or controlling expenses effectively.

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46.

When asked whether funds are readily available for a $75,000 purchase and the accountant responds that the net worth is well over $800,000 and to go ahead with the purchase, the administrator should ____.
- A.
  
  Ask for a statement of working capital
- B.
  
  Make the purchase
- C.
  
  Seek a vertical analysis
- D.
  
  Amortize the purchase
Correct Answer
A. Ask for a statement of working capital

Explanation
The correct answer is to ask for a statement of working capital. This is because the accountant's response of stating the net worth does not provide information about the liquidity or availability of funds for the specific purchase. By asking for a statement of working capital, the administrator can assess the current assets and liabilities of the organization to determine if there are sufficient funds for the purchase without jeopardizing the financial stability of the company.

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47.

When the amount of current assets remaining after current liabilities have been subtracted is calculated, the administrator has an idea of the ____ available to be spent.
- A.
  
  Capital
- B.
  
  Net worth
- C.
  
  Working capital
- D.
  
  Assets
Correct Answer
C. Working capital

Explanation
Working capital refers to the amount of current assets that remain after deducting current liabilities. It represents the funds available to a company for day-to-day operations and can be used to meet short-term obligations. By calculating the working capital, the administrator can determine the amount of money that can be spent on various expenses and investments. Therefore, the correct answer is working capital.

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48.

When the chief financial officer identifies trends in measures of the facility's financial performance by comparing the same relationships for several time periods he is doing ____.
- A.
  
  Comparison analysis
- B.
  
  Time period analysis
- C.
  
  Ratio analyses
- D.
  
  Trade-off comparisons
Correct Answer
C. Ratio analyses

Explanation
The chief financial officer is performing ratio analyses when they compare trends in measures of the facility's financial performance over several time periods. Ratio analysis involves calculating and analyzing various financial ratios to assess the company's financial health and performance. By comparing these ratios over time, the CFO can identify trends and patterns that can help in making informed financial decisions and evaluating the company's overall financial performance.

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49.

A facility has current assets of $403,898 and current liabilities of $367,000. Its current ratio is ____.
- A.
  
  9
- B.
  
  3
- C.
  
  1.1
- D.
  
  2.1
Correct Answer
C. 1.1

Explanation
The current ratio is calculated by dividing current assets by current liabilities. In this case, the current assets are $403,898 and the current liabilities are $367,000. Dividing these two values gives us a current ratio of approximately 1.1. This means that the facility has $1.10 in current assets for every $1.00 in current liabilities.

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50.

A 1-year-old, 120-bed for-profit facility with at $2,500,000 mortgage at 7.4% reports a net operating margin before depreciation of $25,000. In today's financial market, the owners would likely be ___.
- A.
  
  Very pleased
- B.
  
  Very displeased
- C.
  
  Seeking to sell the facility as a result
- D.
  
  Seeking to refinance as a result
Correct Answer
A. Very pleased

Explanation
The owners would likely be very pleased because the facility has a positive net operating margin before depreciation. This means that the facility is generating a profit after all operating expenses are deducted. Additionally, the facility has a mortgage, but the profit generated is enough to cover the mortgage payments and still have a positive net income. This indicates that the facility is financially stable and successful, which would make the owners happy.

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Nursing Home Administration - Finance And Business Quiz

The staff person responsible for assuring that the business office runs smoothly is, in the final analysis, ____.

In general, the ownership patterns for U.S. nursing facilities in 2008 ____.

Generating reports on the financial standing of the nursing facility is generally assigned to ____.

Responsibility and blame for overspending in the department of nursing and in food services is typically assigned by the owners to the ____.

A set of records that lists each monetary transaction of the facility is normally referred to as ____.

The primary purpose of the Generally Accepted Accounting Principles is to ____.

An owner who takes unrecorded cash from the facility daily cash intake to purchase a laptop for his daughter to use at college has violated the ____ concept.

Instructing the financial manager to record assets at current market value and to not record patient bills expected to become uncollectible violates the ____ concept.

Telling the accountant not to record overtime paid from the cash box to employees working weekends is violating the ____ concept.

Directing the accountant to move from a January 1 date to a June 30 fiscal year date in order to minimize the negative image possibly created by an anticipated loss violates the ____ concept.

Allowing the bookkeeper to destroy vouchers showing payments made for meals to employees once these are recorded may violate the ___ concept.

Pieces of paper indicating money owed to or by the facility, bank statements, and similar pieces of paper or its electronic equivalent are known as ____.

An administrator who instructs the accountant to begin reporting facility finances by recording all expenditures and all receipts as they actually occur has decided to use the ____ system of accounting.

It is difficult to recognize items such as depreciation and prepaid insurance in the ____ system of accounting.

An administrator directing the accountant to record revenues when they are earned and expenses when they are incurred by matching revenues and expenses for each time period is the advantage of the ____ system of accounting.

Allowing the facility to accurately measure revenues earned after expenses have been paid or losses incurred by matching revenues and expenses for each time period is the advantage of the ____ system of accounting.

A summary of the nursing home's financial well-being within a time period is normally referred to as ____.

If the administrator asked the bookkeeper for a list containing every account in the facility, the bookkeeper would hand the administrator the ____.

Things owned by the facility are normally referred to as ____.

Things owed by the facility, its obligations, are normally referred to as ____.

Money invested in the facility, also known as the facility's net worth, is normally referred to as ____.

If the administrator asks the accountant for the journals, the administrator wants to look at ____.

The new accountant informs the administrator that to simplify things, he has incorporated all purchases that will be paid for the next few years into the accounts payable journal. The administrator should ____.

Making a debit and a credit entry for each transaction is known as the ____ system of accounting.

Under double-entry bookkeeping, when a bill is sent to Ms. Jones for $3,000 for the past month's care, the bookkeeper would normally record $3,000 in the debit column as an increase in assets and ____.

Using accrual accounting, purchase of a 6-month supply of provisions would be entered into the ____.

Under accrual accounting, when the accountant shows the amount of medical supplies used during a month in the cash disbursements journal and the general journal the bookkeeper has made ____.

When errors are discovered in other journals, they can be corrected by entries into the ____.

When the administrator asks the accountant for a summary of all debits and credits contained in the journals for the time period, the accountant should had the ____ to the administrator.

At the end of a time period, when debits do not match credits exactly, the accountant can first assume an error has been made in ___.

The GAAPS's do not normally require financial statements prepared for general distribution to include ____.

The income statement shows whether ____ were sufficient to cover expenses.

The accountant has listed the new building annex, the new central air conditioning system, and the supplies for the next 6 months as capital expenses. The administrator should.

At the end of a time period, total expenses are subtracted from total revenues to compute the ____.

The accountant, upon successfully bringing the expense and revenue accounts to zero, has successfully ____.

When the administrator asks the chief financial officer for a statement showing the ending balance of the revenue and expenses accounts, the CFO should hand the ____ to the administrator.

A financial statement in which the assets must equal the liability and capital accounts is known as the ____.

Any possession of the facility which will be or could be turned into cash within 12 months is a ____.

The concept that, since capital assets will not be liquidated any time soon, their current market value is not directly relevant, relates to the ongoing concern concept and is known as ____.

Depreciation is an expense associated with the use of ____.

Bills from suppliers of foodstuffs or office supplies, or janitorial services contractors are normally classified as among the ____.

When an administrator notes that there are $600,000 in notes payable on the financial reports, she knows these must be paid within ____.

Funds that have been put into the facility by owners or others, and retained earnings that have been put back into the facility are usually included when calculating the ____.

If the administrator asks the accountant for a statement analyzing the financial position of the facility at the beginning of the fiscal year, the best statement to hand the administrator is the ____.

The certified public accountant's end of year report for a 15-year old, 120-bed for-profit facility with no debt shows an excess of income over expenses of $95,000. The owners would likely be ____.

When asked whether funds are readily available for a $75,000 purchase and the accountant responds that the net worth is well over $800,000 and to go ahead with the purchase, the administrator should ____.

When the amount of current assets remaining after current liabilities have been subtracted is calculated, the administrator has an idea of the ____ available to be spent.

When the chief financial officer identifies trends in measures of the facility's financial performance by comparing the same relationships for several time periods he is doing ____.

A facility has current assets of $403,898 and current liabilities of $367,000. Its current ratio is ____.

A 1-year-old, 120-bed for-profit facility with at $2,500,000 mortgage at 7.4% reports a net operating margin before depreciation of $25,000. In today's financial market, the owners would likely be ___.