BMS BMS Bachelor of Mortuary Science Funeral Home Business Management Questions and Answers 2 — Questions and Answers
Question 1: Which financial statement provides a snapshot of a funeral home's assets, liabilities, and owner's equity at a specific point in time?
- Income statement
- Balance sheet (Correct answer)
- Cash flow statement
- Statement of retained earnings
Correct answer: Balance sheet
A balance sheet reports a business's financial position at a specific date, listing assets, liabilities, and owner's equity.
Question 2: What is the primary purpose of a preneed funeral trust account?
- To pay employee salaries in advance
- To hold consumer funds for future funeral services (Correct answer)
- To cover the funeral home's insurance premiums
- To finance facility renovations
Correct answer: To hold consumer funds for future funeral services
Preneed trust accounts hold funds paid by consumers in advance for funeral services to be provided at a future date.
Question 3: Under FTC regulations, what must a funeral home provide to any person who inquires in person about funeral arrangements?
- A certified copy of the business license
- A General Price List (Correct answer)
- A list of all employees and their qualifications
- An itemized receipt from the last service performed
Correct answer: A General Price List
The FTC Funeral Rule requires funeral homes to provide a written General Price List to anyone who inquires in person about funeral goods or services.
Question 4: Which marketing strategy involves a funeral home partnering with hospice organizations, churches, and community groups to generate referrals?
- Direct mail advertising
- Community-based relationship marketing (Correct answer)
- Television media buying
- Cold-call telemarketing
Correct answer: Community-based relationship marketing
Community-based relationship marketing builds referral networks through partnerships with hospice programs, religious organizations, and civic groups.
Question 5: What does the term 'at-need arrangement' refer to in funeral home operations?
- A preneed contract signed five years in advance
- Planning funeral services at the time of death (Correct answer)
- An annual maintenance agreement for the facility
- A bulk purchasing contract with casket suppliers
Correct answer: Planning funeral services at the time of death
An at-need arrangement is made at or near the time of death, as opposed to preneed planning done in advance.
Question 6: Which type of business insurance protects a funeral home against claims of professional negligence or errors in embalming and preparation?
- General liability insurance
- Professional liability (errors and omissions) insurance (Correct answer)
- Workers' compensation insurance
- Property insurance
Correct answer: Professional liability (errors and omissions) insurance
Professional liability insurance, also called errors and omissions insurance, covers claims arising from professional negligence in services such as embalming.
BMS BMS Bachelor of Mortuary Science Funeral Home Business Management Questions and Answers 2
Which financial statement provides a snapshot of a funeral home's assets, liabilities, and owner's equity at a specific point in time?