ALF Financial Management & Budgeting 5

Question 1

A facility discovers a billing error that overcharged a resident for three months. The financially and ethically correct action is to:

Accepted Answer

Promptly disclose the error and refund or credit the overcharge

Answer

Billing errors must be disclosed and corrected promptly through refund or credit to maintain compliance and trust.

Question 2

Which action most directly improves an ALF's days-in-accounts-receivable metric?

Accepted Answer

Billing promptly and following up on past-due accounts consistently

Answer

Timely billing and consistent collections follow-up shorten the time between service delivery and cash receipt.

Question 3

An administrator is evaluating whether to add a memory care wing. Which financial tool best compares the long-term costs and revenues of this investment?

Accepted Answer

A capital investment analysis such as net present value or return on investment

Answer

Capital investment analysis tools like NPV and ROI evaluate whether long-term projects will generate returns exceeding their costs.

Question 4

A facility's contract states rates may increase with 30 days' written notice. Raising rates without providing this notice creates what type of risk?

Accepted Answer

Legal and financial risk from breach of the residency agreement

Answer

Ignoring contractual notice requirements exposes the facility to breach-of-contract claims, refunds, and regulatory complaints.

Question 5

Which expense is most appropriately classified as a variable cost in an ALF operating budget?

Accepted Answer

Food and dietary supplies

Answer

Food costs rise and fall with the number of residents served, making them variable, unlike salaries, taxes, and debt service.

(ALF) Assisted Living Facility Administrator Certification Practice Test

(ALF) Assisted Living Facility Administrator Certification Practice Test

ALF Financial Management & Budgeting 5