Healthcare Finance Test 1 Questions And Answers Most Reviewed
Rationale.
A business's set of financial statements includes which of the following items? - ans- answers
(a),(b), and (c)
-income statement
-balance sheet
-statement of cash flows
A fire destroyed a large percentage of the financial records of the Carter Health System. You
have the task of piecing together information to prepare a financial report. You have found the
profit margin to be 5.4 percent. If sales were $4 million on total assets of $2 million and the
amount of debt financing was $800,000, what was Carter's return on equity? (Hint: Use the Du
Pont equation to answer this question.) - ans18.0 percent
A medical home (patient-centered medical home) is a team-based model of care led by a
personal physician who works collaboratively with the team's other healthcare professionals to
provide continuous, coordinated, and integrated care throughout a patient's lifetime. - anstrue
Accounting rules and regulations provide an exact answer to every accounting question, leaving
no opportunity for negotiation, compromise, or interpretation in the preparation and presentation
of financial statements - ansfalse
Assume Mercy Hospital uses accrual accounting. Which of the following statements is most
correct - ans- patient service revenue is recognized when healthcare services are provided
Assume that a business's balance sheet reports total assets of $500,000 and total liabilities of
$300,000. Now assume that $20,000 of net fixed assets (net plant and equipment) are written off
due to technological obsolescence. All else the same, what is the total equity of the business after
the write-off - ans180,000
assume that jane adams pays income taxes at a 35 percent rate. What would be the after-tax
amount on $100 of interest income she receives? - ans$65
, Healthcare Finance Test 1 Questions And Answers Most Reviewed
Rationale.
Assume that John Richards pays income taxes at a 30percent rate. He currently owns a not-for-
profit (municipal) bond that pays 5 percent interest. What interest rate would have to be set on a
for-profit (corporate) bond to produce the same amount of usable (after-tax) income? - ans7.1
percent
Assume that Reginald Worthington, who pays 40 percent in income taxes, plans to contribute
100,000 to not-for-profit Ravenswood Community Hospital. Without contribution, his tax bill
would be 500,000.. What would be his tax bill if he makes the contribution? - ans460,000
assume that the value of diagnostic equipment suddenly falls because of technological
obsolescence. How is the balance sheet adjusted to preserve that accounting identity? - ansequity
is reduced
because financial statements are based on historical data, financial statement analysis is typically
used only to evaluate an organization's past financial condition - ansfalse
because not-for-profits are not owned by shareholders, the return on-equity ratio is irrelevant for
not-for-profits - ansfalse
Because the organizational and financial goals of for-profit and not-for-profit provider
organizations differ, their financial decision-making processes lead to different decisions -
ansfalse
Carlisle Clinic, a not-for-profit organization, reported an equity balance of $1 million on its
December 2012 balance sheet. Assuming Carlisle Clinic reported net income of $200,000 for the
year that ended December 31, 2012, and had no other adjustments to equity during 2012, what
was Carlisle Clinic's equity balance as of December 31, 2011? - ans$800,000
common-size financial statements are created by dividing all income statements items and
balance sheet accounts by total assets - ansfalse
Rationale.
A business's set of financial statements includes which of the following items? - ans- answers
(a),(b), and (c)
-income statement
-balance sheet
-statement of cash flows
A fire destroyed a large percentage of the financial records of the Carter Health System. You
have the task of piecing together information to prepare a financial report. You have found the
profit margin to be 5.4 percent. If sales were $4 million on total assets of $2 million and the
amount of debt financing was $800,000, what was Carter's return on equity? (Hint: Use the Du
Pont equation to answer this question.) - ans18.0 percent
A medical home (patient-centered medical home) is a team-based model of care led by a
personal physician who works collaboratively with the team's other healthcare professionals to
provide continuous, coordinated, and integrated care throughout a patient's lifetime. - anstrue
Accounting rules and regulations provide an exact answer to every accounting question, leaving
no opportunity for negotiation, compromise, or interpretation in the preparation and presentation
of financial statements - ansfalse
Assume Mercy Hospital uses accrual accounting. Which of the following statements is most
correct - ans- patient service revenue is recognized when healthcare services are provided
Assume that a business's balance sheet reports total assets of $500,000 and total liabilities of
$300,000. Now assume that $20,000 of net fixed assets (net plant and equipment) are written off
due to technological obsolescence. All else the same, what is the total equity of the business after
the write-off - ans180,000
assume that jane adams pays income taxes at a 35 percent rate. What would be the after-tax
amount on $100 of interest income she receives? - ans$65
, Healthcare Finance Test 1 Questions And Answers Most Reviewed
Rationale.
Assume that John Richards pays income taxes at a 30percent rate. He currently owns a not-for-
profit (municipal) bond that pays 5 percent interest. What interest rate would have to be set on a
for-profit (corporate) bond to produce the same amount of usable (after-tax) income? - ans7.1
percent
Assume that Reginald Worthington, who pays 40 percent in income taxes, plans to contribute
100,000 to not-for-profit Ravenswood Community Hospital. Without contribution, his tax bill
would be 500,000.. What would be his tax bill if he makes the contribution? - ans460,000
assume that the value of diagnostic equipment suddenly falls because of technological
obsolescence. How is the balance sheet adjusted to preserve that accounting identity? - ansequity
is reduced
because financial statements are based on historical data, financial statement analysis is typically
used only to evaluate an organization's past financial condition - ansfalse
because not-for-profits are not owned by shareholders, the return on-equity ratio is irrelevant for
not-for-profits - ansfalse
Because the organizational and financial goals of for-profit and not-for-profit provider
organizations differ, their financial decision-making processes lead to different decisions -
ansfalse
Carlisle Clinic, a not-for-profit organization, reported an equity balance of $1 million on its
December 2012 balance sheet. Assuming Carlisle Clinic reported net income of $200,000 for the
year that ended December 31, 2012, and had no other adjustments to equity during 2012, what
was Carlisle Clinic's equity balance as of December 31, 2011? - ans$800,000
common-size financial statements are created by dividing all income statements items and
balance sheet accounts by total assets - ansfalse
