ALF Financial Management & Budgeting 2

Question 1

An ALF administrator notices that actual food service costs exceeded the budgeted amount by 12% this quarter. What is the most appropriate first step?

Accepted Answer

Perform a variance analysis to identify the cause

Answer

Immediately reduce meal portions for residents

Answer

Terminate the dietary manager

Answer

Raise resident fees the following month

Question 2

Which budgeting method requires every expense line to be justified from a zero base each budget cycle, rather than adjusting prior-year figures?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Flexible budgeting

Answer

Capital budgeting

Question 3

In an assisted living facility, the purchase of a new commercial washer expected to last 10 years should appear in which budget?

Accepted Answer

Capital budget

Answer

Operating budget

Answer

Cash budget

Answer

Payroll budget

Question 4

A facility's occupancy drops from 92% to 80%. Which financial effect is most immediate?

Accepted Answer

Reduced revenue while fixed costs remain largely unchanged

Answer

Lower fixed costs such as mortgage payments

Answer

Higher per-resident food costs due to bulk discounts

Answer

An automatic increase in Medicaid reimbursement

Question 5

Which financial statement shows an assisted living facility's revenues and expenses over a specific period, resulting in net income or loss?

Accepted Answer

Income statement

Answer

Balance sheet

Answer

Statement of cash flows

Answer

Trial balance

Question 6

Accounts receivable aging reports are primarily used by an ALF administrator to:

Accepted Answer

Track how long resident balances have gone unpaid

Answer

Schedule depreciation of facility assets

Answer

Calculate staff overtime liability

Answer

Forecast utility rate increases

Question 7

Under accrual accounting, when should an ALF record revenue for services provided to a resident in June but paid in August?

Accepted Answer

In June, when the service was provided

Answer

In August, when cash is received

Answer

In July, split between the two months

Answer

At fiscal year-end only