Introduction to Health Care finance
and Accounting Question and answers
rated A+ 2025/2026
Capitated payment plans common before 1965 - correct answer ✔False
Preferred Provider Organization (PPO) plans are a form of Managed Care - correct answer ✔True
Some parts of the Patient Protection and affordable Care act of 2010 will not go into effect until 2018 -
correct answer ✔True
The Patient Protection and Affordable Care Act of 2010 eliminated the "donut hole" in prescription drug
benefits for Medicare beneficiaries - correct answer ✔True
A bookkeeper mistakenly posted a transaction to the Cash account and the Medical Services account. It
was supposed to be posted to the Cash account and the Product Sales Account. This error will be
detected with a trial balance. - correct answer ✔False ( The total of all accounts with a credit balance
will equal the total of all accounts with a debit balance, despite the error, because the Medical Services
and the Product Sales Accounts are both credit accounts)
One task of a full-time accountant at a publicly held corporation is to prepare an annual audit of the
corporation's financial records. - correct answer ✔False (This task is performed by outside auditors)
A hospital buys a SuperScanner that costs $10,000,000. The hospital accountant was told that the
SuperScanner is expected to last for 12 years. One year later, the accountant learns that the
SuperScanner life expectancy was incorrect, and that it will last only six years. The accountant should
not change the depreciation schedule or amend the previous year's financial reports. - correct answer
✔False (The consistency principle requires that accounting treatments should not be arbitrarily
changed. However, this is not an arbitrary change. The SuperScanner is so expensive that the principle
of materiality requires corrections to the depreciation schedule and the previous year's reports)
, Materiality is the accounting principle that requires all material purchases to be recorded as
consumables or as capital assets. - correct answer ✔False
Salvage value refers to the money saved by purchasing used equipment instead of new. - correct
answer ✔False
A dental practice has fiscal year revenues of $850,000 and expenses of $520,000. The practice's net
income for that fiscal year is $330,000. - correct answer ✔True
Two physical therapists own a partnership and receive draws each month for the medical services they
provided. The draws should be recorded as business expenses. - correct answer ✔True
Home healthcare services are in decline because providing services at home is not cost effective. -
correct answer ✔False
Healthcare is more heavily regulated than most other businesses in the United States. - correct answer
✔True
The Recovery Audit Contractor (RAC) Program detects approximately three-fourths of the fraud and
abuse in Medicare and Medicaid programs. - correct answer ✔True
The net worth of a company is its revenues minus its expenditures. - correct answer ✔False
Accrued liabilities are the total of all liabilities in the current fiscal year - correct answer ✔False
A business uses the calendar year for its fiscal year. On March 10th, it buys six months of liability
insurance that will go into effect on April 1st. This should be listed in the books as a prepaid expense -
correct answer ✔False
and Accounting Question and answers
rated A+ 2025/2026
Capitated payment plans common before 1965 - correct answer ✔False
Preferred Provider Organization (PPO) plans are a form of Managed Care - correct answer ✔True
Some parts of the Patient Protection and affordable Care act of 2010 will not go into effect until 2018 -
correct answer ✔True
The Patient Protection and Affordable Care Act of 2010 eliminated the "donut hole" in prescription drug
benefits for Medicare beneficiaries - correct answer ✔True
A bookkeeper mistakenly posted a transaction to the Cash account and the Medical Services account. It
was supposed to be posted to the Cash account and the Product Sales Account. This error will be
detected with a trial balance. - correct answer ✔False ( The total of all accounts with a credit balance
will equal the total of all accounts with a debit balance, despite the error, because the Medical Services
and the Product Sales Accounts are both credit accounts)
One task of a full-time accountant at a publicly held corporation is to prepare an annual audit of the
corporation's financial records. - correct answer ✔False (This task is performed by outside auditors)
A hospital buys a SuperScanner that costs $10,000,000. The hospital accountant was told that the
SuperScanner is expected to last for 12 years. One year later, the accountant learns that the
SuperScanner life expectancy was incorrect, and that it will last only six years. The accountant should
not change the depreciation schedule or amend the previous year's financial reports. - correct answer
✔False (The consistency principle requires that accounting treatments should not be arbitrarily
changed. However, this is not an arbitrary change. The SuperScanner is so expensive that the principle
of materiality requires corrections to the depreciation schedule and the previous year's reports)
, Materiality is the accounting principle that requires all material purchases to be recorded as
consumables or as capital assets. - correct answer ✔False
Salvage value refers to the money saved by purchasing used equipment instead of new. - correct
answer ✔False
A dental practice has fiscal year revenues of $850,000 and expenses of $520,000. The practice's net
income for that fiscal year is $330,000. - correct answer ✔True
Two physical therapists own a partnership and receive draws each month for the medical services they
provided. The draws should be recorded as business expenses. - correct answer ✔True
Home healthcare services are in decline because providing services at home is not cost effective. -
correct answer ✔False
Healthcare is more heavily regulated than most other businesses in the United States. - correct answer
✔True
The Recovery Audit Contractor (RAC) Program detects approximately three-fourths of the fraud and
abuse in Medicare and Medicaid programs. - correct answer ✔True
The net worth of a company is its revenues minus its expenditures. - correct answer ✔False
Accrued liabilities are the total of all liabilities in the current fiscal year - correct answer ✔False
A business uses the calendar year for its fiscal year. On March 10th, it buys six months of liability
insurance that will go into effect on April 1st. This should be listed in the books as a prepaid expense -
correct answer ✔False
