ALF Financial Management and Budgeting 3

Question 1

Which financial statement shows a facility's assets, liabilities, and owner's equity at a specific point in time?

Accepted Answer

Balance sheet

Answer

Income statement

Answer

Budget variance report

Answer

Statement of cash flows

Question 2

An ALF administrator wants to know whether the facility can meet its short-term obligations. Which ratio is most useful?

Accepted Answer

Current ratio

Answer

Return on assets

Answer

Debt-to-equity ratio

Answer

Payroll-to-revenue ratio

Question 3

Under accrual accounting, when should a facility record revenue for care services provided in June but paid for in July?

Accepted Answer

In June, when the service was provided

Answer

Split evenly between both months

Answer

In whichever month benefits the budget

Answer

In July, when payment was received

Question 4

A resident's family disputes a charge and refuses to pay a $2,000 balance the facility determines is uncollectible. How should this be recorded?

Accepted Answer

As a bad debt expense

Answer

As deferred revenue

Answer

As a capital loss

Answer

As a contractual allowance

Question 5

Which strategy is most appropriate for an administrator facing a projected cash shortfall in the next 60 days?

Accepted Answer

Accelerate billing and collections while delaying non-essential purchases

Answer

Reduce required staffing below state minimums

Answer

Cancel the facility's liability insurance

Answer

Stop paying payroll taxes temporarily

Question 6

What does the term 'per resident day' (PRD) cost measure in facility financial analysis?

Accepted Answer

Average cost of operating the facility for one resident for one day

Answer

The state-mandated daily reimbursement cap

Answer

Total annual cost divided by number of employees

Answer

Daily revenue from the highest-paying resident

Question 7

During budget preparation, an administrator projects census will rise from 85% to 90% occupancy. Which expense category should be adjusted upward as a direct result?

Accepted Answer

Variable costs such as food and care supplies

Answer

Mortgage principal payments

Answer

Building depreciation

Answer

Property taxes