C428 Financial Resource Management in Healthcare
Access The Exact Questions for C428 Financial Resource Management in Healthcare
💯 100% Pass Rate guaranteed
🗓️ Unlock for 1 Month
Rated 4.8/5 from over 1000+ reviews
- Unlimited Exact Practice Test Questions
- Trusted By 200 Million Students and Professors
Starting from
$30/month
What’s Included:
- Unlock 100 + Actual Exam Questions and Answers for C428 Financial Resource Management in Healthcare on monthly basis
- Well-structured questions covering all topics, accompanied by organized images.
- Learn from mistakes with detailed answer explanations.
- Easy To understand explanations for all students.
Your All-In-One Prep Package: Ready C428 Financial Resource Management in Healthcare : Practice Questions & Answers
Free C428 Financial Resource Management in Healthcare Questions
1. What does the Acid-Test Ratio indicate about a healthcare facility's financial position?
- The facility's ability to cover its long-term debts
- The facility's capacity to pay its current liabilities quickly
- The facility's overall profitability over the last year
- The facility's total assets compared to its total liabilities
Explanation
The Acid-Test Ratio, also known as the quick ratio, measures a healthcare facility’s ability to meet its short-term obligations without relying on the sale of inventory. It is calculated by dividing quick assets—cash, accounts receivable, and other liquid assets—by current liabilities. A higher ratio indicates strong liquidity, showing that the facility can quickly cover its immediate financial obligations, which is critical for maintaining operational stability.
2. A medical assistant is reviewing charges for an in-office procedure. Which of the following terms describes the maximum reimbursement a third-party payer will provide?
- Allowable amount is the maximum reimbursement a third party payer will provide for a particular procedure or service.
- Deductible is the specific amount of money a patient must pay out of pocket before an insurance carrier begins paying.
- Coinsurance is a policy provision frequently found in medical insurance where an insurance company and the policyholder share the cost of covered charges in a specified ratio, such as 80:20.
- Fee schedule is a list of charges for procedures and services performed in the provider's office.
Explanation
The allowable amount is the maximum reimbursement a third-party payer, such as an insurance company or government program, will provide for a specific medical procedure or service. This amount sets a limit on the payment that can be made for the service, ensuring that providers do not bill more than what is covered under the patient’s plan. Understanding the allowable amount is essential for accurate billing, compliance with payer policies, and financial planning within the healthcare office.
3. The average collection period is computed by dividing
- net credit sales by ending gross accounts receivable
- net credit sales by average gross accounts receivable
- the accounts receivable turnover by 365 days
- 365 days by the accounts receivable turnover
Explanation
The average collection period measures the average number of days it takes for a healthcare organization to collect payments from its patients or third-party payers. It is calculated by dividing 365 days by the accounts receivable turnover ratio. This metric helps healthcare managers assess the efficiency of their billing and collection processes and manage cash flow effectively, ensuring that outstanding receivables are converted into cash in a timely manner.
4. What term refers to the financial obligations a healthcare facility has to its vendors for products and services received but not yet paid for?
- Accounts Receivable
- Accounts Payable
- Accrued Expenses
- Deferred Revenue
Explanation
Accounts payable represents the amounts a healthcare facility owes to its vendors or suppliers for goods and services that have been received but not yet paid for. Managing accounts payable effectively ensures that the facility maintains good vendor relationships, avoids late payment penalties, and accurately reflects its short-term liabilities in financial statements.
5. The current ratio is:
- also known as the "acid test"
- the ratio of quick assets to current liabilities
- the ratio of current assets to current liabilities
- the ratio of inventories to prepaid expenses
Explanation
The current ratio measures a healthcare facility’s ability to meet short-term obligations using its current assets. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates greater liquidity and financial stability, showing that the organization has sufficient resources to cover short-term debts and operational expenses. This ratio is a key indicator of the organization’s short-term financial health.
6. A firm has served a customer with its products. However, the customer did not pay the price because she has a contract with the firm to make one lump sum payment at the end of the month. Which one of the following is the most accurate description about this situation?
- A revenue transaction has happened. The firm must record its revenues with another record for future collection (Acct. Receivable)
- A revenues transaction has not happened because the payment has not been made. The firm should not record it until the payment is made.
- The firm must record its expenses because it has spent its own material for the service.
- The firm must record loss because it has spent its material without being paid.
Explanation
In this situation, a revenue transaction has occurred because the firm has already provided goods or services to the customer. Under the accrual basis of accounting, revenue is recognized when it is earned, not necessarily when cash is received. Since payment will be made at a later date, the firm must record the revenue and also create an entry for accounts receivable, reflecting the amount owed by the customer that will be collected in the future.
7. What action must a creditor take immediately upon receiving a notification of a Chapter 7 bankruptcy filing from a debtor?
- Initiate a new payment plan with the debtor
- Flag the patient account
- Suspend all collection activity
- Continue normal collection efforts
Explanation
Upon receiving a notification of a Chapter 7 bankruptcy filing, creditors are required by law to immediately suspend all collection activities. This includes halting phone calls, letters, or any attempts to collect the debt, as the automatic stay goes into effect. The stay protects the debtor from any further collection efforts while the bankruptcy proceedings determine the dischargeability of debts.
8. An information systems audit...
- examines the reliability and integrity of financial transactions, account records, and financial statements.
- reviews the controls of an AIS to assess its compliance with internal control policies and procedures and its effectiveness in safeguarding assets.
- is concerned with the economical and efficient use of resources and the accomplishment of established goals and objectives.
- examines incidents of possible fraud, misappropriation of assets, waste and abuse, or improper governmental activities.
Explanation
An information systems (IS) audit evaluates the controls, security, and reliability of an organization's automated information systems, including accounting information systems (AIS). Its primary purpose is to assess compliance with internal control policies, ensure the accuracy and integrity of financial data, and verify that assets are properly safeguarded. This type of audit helps organizations identify weaknesses in their systems and implement corrective measures to maintain operational and financial integrity.
9. What is the primary function of a cost center within a healthcare organization?
- To generate revenue through patient services
- To manage and control its own operational costs
- To oversee the financial reporting of the organization
- To ensure compliance with regulatory standards
Explanation
A cost center in a healthcare organization is a department or unit that does not directly generate revenue but is responsible for managing and controlling its operational expenses. Examples include radiology, laboratory, or housekeeping departments. By tracking costs and ensuring efficient use of resources, cost centers help the organization maintain financial control and allocate resources effectively, supporting overall operational efficiency.
10. CASH FLOW is the difference between:
- liabilities and assets.
- receipts from checks and receipts from cash.
- estimated cost and actual cost.
- receipts and disbursements.
Explanation
Cash flow represents the net movement of cash into and out of an organization over a specific period. It is calculated as the difference between cash receipts (inflows) and cash disbursements (outflows). Monitoring cash flow is essential for healthcare organizations to ensure they have sufficient liquidity to cover operating expenses, invest in resources, and maintain financial stability.
How to Order
1
Select Your Exam
Click on your desired exam to open its dedicated page with resources like practice questions, flashcards, and study guides.Choose what to focus on, Your selected exam is saved for quick access Once you log in.
2
Subscribe
Hit the Subscribe button on the platform. With your subscription, you will enjoy unlimited access to all practice questions and resources for a full 1-month period. After the month has elapsed, you can choose to resubscribe to continue benefiting from our comprehensive exam preparation tools and resources.
3
Pay and unlock the practice Questions
Once your payment is processed, you’ll immediately unlock access to all practice questions tailored to your selected exam for 1 month .