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

Variance analysis identifies whether the overage stems from price increases, census changes, waste, or other causes before corrective action is taken.

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

Zero-based budgeting starts each line at zero and requires justification for all expenditures, unlike incremental budgeting which adjusts prior-year amounts.

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

Long-lived, high-cost assets like commercial equipment are planned through the capital budget, not the operating 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

Occupancy declines cut revenue immediately, but fixed costs like debt service and insurance do not fall with census.

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

The income statement (profit and loss statement) reports revenues minus expenses over a period to show net income or loss.

(ALF) Assisted Living Facility Administrator Certification Practice Test

(ALF) Assisted Living Facility Administrator Certification Practice Test

ALF Financial Management & Budgeting 2