HSA 464 Test 3 Questions and Answers
A+ Graded (2025)
Working .capital .is .defined .as .the .- .CORRECT .ANSWER-sum .of .a .healthcare
.organization's .investment .in .current .assets.
Examples .of .current .assets .include .- .CORRECT .ANSWER--inventories
-prepaid .expenses
Liquidity .refers .to .- .CORRECT .ANSWER-how .quickly .an .asset .can .be .converted
.into .cash
What .are .the .advantages .of .having .sufficient .working .capital .on .hand? .-
.CORRECT .ANSWER--Organizations .are .able .to .pay .their .employees .and .vendors
.on .time, .thereby . maintaining .a .positive .relationship
&
-Organizations .have .sufficient .resources .to .repay .loans .and .are .therefore
.creditworthy
Where .does .initial .working .capital .for .for-profit .healthcare .organizations .come
.from? .- .CORRECT .ANSWER-philanthropy . or .tax-exempt .bonds
Permanent .working .capital .is .- .CORRECT .ANSWER-the .minimum .amount .of
.working .capital .always .on .hand
Sources .of .temporary .working .capital .include .- .CORRECT .ANSWER--trade .credit
-equity
-debt
An .organization .using .trade .credits .to .finance .temporary .working .capital .is
.essentially .- .CORRECT .ANSWER-borrowing .money .from .a .loan .company .to
.finance .the .purchase .of .the .working .capital
What .does .the .term ."5-15, .net .30" .mean? .- .CORRECT .ANSWER-An .organization
.can .receive .a .5% .discount .if .it .pays .within .15 .days
What .are .cash .flows? .- .CORRECT .ANSWER-The .difference .between .cash
.receipts .and .cash .disbursements
, Why .do .healthcare .organizations .keep .cash .on .hand? .- .CORRECT .ANSWER-All
.of .the .above .
-For .the .expected .demand .to .pay .employees .and .vendors .in .cash .
-For .emergencies .and .unexpected .purchases .
-For .the .unexpected .demand .for .cash .when .a .vendor .offers .a .price .reduction .the
.organization .does .not .want .to .pass .up
The .average .payment .period .ratio .indicates .- .CORRECT .ANSWER-the .average
.amount .of .time .that .passes .before .a .current .liability .is .paid
Sunshine .clinic .purchases .a .piece .of .equipment .for .$250 .with .a .2-15 .net .30
.provision. .What .is .the .effective .interest .rate .if .the .clinic .pays .on .day .16? .on .day
.30? .- .CORRECT .ANSWER-745 .percent .on .day .16; .49.7 .percent .on .day .30
Accounts .receivable .are .- .CORRECT .ANSWER-money .due .to .the .organization
.from .patients .and .third .parties .for .services .already .rendered
Which .of .the .following .factors .set .the .healthcare .industry .apart .from .other
.industries .regarding .accounts .receivable? .- .CORRECT .ANSWER--The .cost .of
.services
-The .method .of .payment .for .services
What .is .the .primary .source .of .data .required .for .reimbursement .from .third
.parties? .- .CORRECT .ANSWER-The .medical .record
An .organization .incurs .carrying .costs .- .CORRECT .ANSWER-when .it .extends
.credit .to .patients .after .providing .services
An .organization .incurs .credit-and-collection .costs .- .CORRECT .ANSWER-for
.billing .and .collecting .during .the .organization's .average .payment .cycle
An .organization .incurs .delinquency .costs .- .CORRECT .ANSWER-when .patients
.do .not .pay .on .time
The .objective .of .revenue .cycle .management .is .to .- .CORRECT .ANSWER-reduce
.the .collection .period
Which .of .the .following .is .an .advantage .of .having .an .internal .control .system? .-
.CORRECT .ANSWER--It .gives .employees .direction .through .policies .and
.procedures
-It .reduces .the .risk .of .losing .assets .through .errors
A .coding .compliance .plan .should .ensure .- .CORRECT .ANSWER--that .an
.organization .is .using .the .right .coding .resources
-that .the .HIM .department .is .conducting .periodic .training .for .all .coders
-continuous .development .and .revision .of .coding .policies
An .organization's .credit .and .collection .policies .address .which .of .the .following
.issues? .- .CORRECT .ANSWER--Charity .care, .bad .debt, .and .self-pay
A+ Graded (2025)
Working .capital .is .defined .as .the .- .CORRECT .ANSWER-sum .of .a .healthcare
.organization's .investment .in .current .assets.
Examples .of .current .assets .include .- .CORRECT .ANSWER--inventories
-prepaid .expenses
Liquidity .refers .to .- .CORRECT .ANSWER-how .quickly .an .asset .can .be .converted
.into .cash
What .are .the .advantages .of .having .sufficient .working .capital .on .hand? .-
.CORRECT .ANSWER--Organizations .are .able .to .pay .their .employees .and .vendors
.on .time, .thereby . maintaining .a .positive .relationship
&
-Organizations .have .sufficient .resources .to .repay .loans .and .are .therefore
.creditworthy
Where .does .initial .working .capital .for .for-profit .healthcare .organizations .come
.from? .- .CORRECT .ANSWER-philanthropy . or .tax-exempt .bonds
Permanent .working .capital .is .- .CORRECT .ANSWER-the .minimum .amount .of
.working .capital .always .on .hand
Sources .of .temporary .working .capital .include .- .CORRECT .ANSWER--trade .credit
-equity
-debt
An .organization .using .trade .credits .to .finance .temporary .working .capital .is
.essentially .- .CORRECT .ANSWER-borrowing .money .from .a .loan .company .to
.finance .the .purchase .of .the .working .capital
What .does .the .term ."5-15, .net .30" .mean? .- .CORRECT .ANSWER-An .organization
.can .receive .a .5% .discount .if .it .pays .within .15 .days
What .are .cash .flows? .- .CORRECT .ANSWER-The .difference .between .cash
.receipts .and .cash .disbursements
, Why .do .healthcare .organizations .keep .cash .on .hand? .- .CORRECT .ANSWER-All
.of .the .above .
-For .the .expected .demand .to .pay .employees .and .vendors .in .cash .
-For .emergencies .and .unexpected .purchases .
-For .the .unexpected .demand .for .cash .when .a .vendor .offers .a .price .reduction .the
.organization .does .not .want .to .pass .up
The .average .payment .period .ratio .indicates .- .CORRECT .ANSWER-the .average
.amount .of .time .that .passes .before .a .current .liability .is .paid
Sunshine .clinic .purchases .a .piece .of .equipment .for .$250 .with .a .2-15 .net .30
.provision. .What .is .the .effective .interest .rate .if .the .clinic .pays .on .day .16? .on .day
.30? .- .CORRECT .ANSWER-745 .percent .on .day .16; .49.7 .percent .on .day .30
Accounts .receivable .are .- .CORRECT .ANSWER-money .due .to .the .organization
.from .patients .and .third .parties .for .services .already .rendered
Which .of .the .following .factors .set .the .healthcare .industry .apart .from .other
.industries .regarding .accounts .receivable? .- .CORRECT .ANSWER--The .cost .of
.services
-The .method .of .payment .for .services
What .is .the .primary .source .of .data .required .for .reimbursement .from .third
.parties? .- .CORRECT .ANSWER-The .medical .record
An .organization .incurs .carrying .costs .- .CORRECT .ANSWER-when .it .extends
.credit .to .patients .after .providing .services
An .organization .incurs .credit-and-collection .costs .- .CORRECT .ANSWER-for
.billing .and .collecting .during .the .organization's .average .payment .cycle
An .organization .incurs .delinquency .costs .- .CORRECT .ANSWER-when .patients
.do .not .pay .on .time
The .objective .of .revenue .cycle .management .is .to .- .CORRECT .ANSWER-reduce
.the .collection .period
Which .of .the .following .is .an .advantage .of .having .an .internal .control .system? .-
.CORRECT .ANSWER--It .gives .employees .direction .through .policies .and
.procedures
-It .reduces .the .risk .of .losing .assets .through .errors
A .coding .compliance .plan .should .ensure .- .CORRECT .ANSWER--that .an
.organization .is .using .the .right .coding .resources
-that .the .HIM .department .is .conducting .periodic .training .for .all .coders
-continuous .development .and .revision .of .coding .policies
An .organization's .credit .and .collection .policies .address .which .of .the .following
.issues? .- .CORRECT .ANSWER--Charity .care, .bad .debt, .and .self-pay
