ALF Financial Management & Budgeting 4

Question 1

An ALF administrator wants to know the minimum occupancy needed to cover all costs. Which analysis should be performed?

Accepted Answer

Break-even analysis

Answer

Break-even analysis determines the census or revenue level at which total revenue equals total costs.

Question 2

Which internal control best reduces the risk of embezzlement in the facility's business office?

Accepted Answer

Segregation of duties so no one person handles billing, collections, and reconciliation

Answer

Separating billing, cash handling, and reconciliation among different people prevents any single employee from concealing theft.

Question 3

A prospective resident asks whether Medicare will pay for her assisted living room and board. The financially accurate answer is:

Accepted Answer

Medicare does not cover assisted living room and board costs

Answer

Medicare does not pay for assisted living room and board; payment typically comes from private funds, long-term care insurance, or Medicaid waivers in some states.

Question 4

Labor typically represents what portion of an assisted living facility's operating expenses?

Accepted Answer

The largest single expense category, often around half or more

Answer

Staffing is normally the largest operating cost in assisted living, commonly 50% or more of total operating expenses.

Question 5

The facility's current ratio is 0.7. What does this indicate?

Accepted Answer

Current liabilities exceed current assets, signaling potential short-term liquidity problems

Answer

A current ratio below 1.0 means current assets are insufficient to cover current liabilities, indicating liquidity risk.

(ALF) Assisted Living Facility Administrator Certification Practice Test

(ALF) Assisted Living Facility Administrator Certification Practice Test

ALF Financial Management & Budgeting 4