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

The balance sheet is a snapshot of financial position at a single date, following the equation assets = liabilities + equity.

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

The current ratio compares current assets to current liabilities, measuring short-term liquidity.

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

Accrual accounting recognizes revenue when it is earned, not when cash is 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

Uncollectible resident accounts are written off as bad debt expense.

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

Speeding up cash inflows and deferring discretionary outflows manages a shortfall without violating legal obligations.

(ALF) Assisted Living Facility Administrator Certification Practice Test