Nurse Executive Test Nurse Executive Test Financial Management & Budgeting 1

Question 1

What type of budget adjusts projected expenses based on actual patient volume and acuity?

Accepted Answer

Flexible budget

Answer

A flexible budget recalculates expected costs as patient volume and acuity change, providing a more accurate financial picture.

Question 2

Which financial metric measures the total cost of delivering nursing care divided by the number of patient days?

Accepted Answer

Cost per patient day (CPPD)

Answer

Cost per patient day calculates total nursing expenses per patient day to benchmark efficiency across units or time periods.

Question 3

A nurse executive notices a significant variance between budgeted and actual staffing costs. What should be done FIRST?

Accepted Answer

Analyze the root cause of the variance

Answer

Identifying the root cause of variance enables informed corrective action rather than reactive decisions that may worsen the situation.

Question 4

What is a capital expenditure in healthcare financial management?

Accepted Answer

Long-term investments in equipment or infrastructure with multi-year value

Answer

Capital expenditures represent major investments such as medical equipment or facility renovations that provide value over multiple years.

Question 5

Which financial statement shows an organization's financial position at a specific point in time?

Accepted Answer

Balance sheet

Answer

The balance sheet presents assets, liabilities, and equity, reflecting the organization's financial position at a single given date.

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