Q&A Hero

Q: sam is responsible for generating revenue for the green tree nursing center. he also fills in for the office manager on alternate weekends. is sam managing a responsibility center? a. yes b. no c. not applicable

Q: susans sole duties involve managing and controlling cost in the great plains medical center. is sue managing a responsibility center? a, yes b, no c. not applicable

Q: the business of hospitals and healthcare systems is typically: a. the manufacture of products b. the delivery of manufactured products c. the delivery of services d. research and development

Q: when matching revenue and expense, the term cost of sales is the common usage for: a. manufacturing firms b. physician groups c. outpatient clinics d. nursing facilities

Q: the product cost concept is most important to: a. a nursing unit supervisor b. a medical records director c. a pharmacy department manager

Q: costs that are matched with revenue on the basis of the span of time during which the cost is incurred are known as: a. cost objectives b. cost centers c. product costs d. period costs

Q: a term that was originally associated with manufacturing rather than with services such as healthcare is: a. cost objectives b. cost centers c. product costs d. period costs

Q: another term for responsibility center is: a. profit center b. cost object c. allocation center d. neither of the above

Q: if a cost cannot be specifically associated with a particular cost object, then it is: a. a direct cost b. an indirect cost c. either of the above d. neither of the above

Q: any unit for which a separate cost measurement is desired may be known as a: a. cost object b. cost objective c. either of the above

Q: costs that can be specifically associated with a particular unit or a specific patient are considered to be: a. direct costs b. indirect costs c. either of the above d. neither of the above

Q: costs that cannot be traced are considered to be: a. direct costs b. indirect costs c. supplementary costs d. primary costs e. none of the above

Q: costs that can be traced are considered to be: a. direct costs b. indirect costs c. supplementary costs d. primary costs e. none of the above

Q: in many hospitals, drugs that are requisitioned by the intensive care unit (icu) are traced, and thus recorded, as part of icu costs. in this circumstance the cost is: a. an indirect cost b. a direct cost c. either of the above d. neither of the above

Q: in many hospitals, orientation training expense (aka educational resources) is a shared expense that will be allocated to multiple departments. in these cases it is: a. an indirect cost b. a direct cost c. either of the above d. neither of the above

Q: in most organizations, the human resources department is considered to be a: a. responsibility center b. support center c. either of the above d. neither of the above

Q: when real estate taxes are allocated, they are considered to be: a. direct costs b. indirect costs c. either of the above d. neither of the above

Q: certain lab technology expenses have been incurred. because these expenses are for the particular benefit of the radiology department, they are considered to be: a. direct costs b. indirect costs c. neither of the above

Q: indirect costs are sometimes called: a. common costs b. uniform costs c. joint costs d. a & b e. a & c f. b & c g. none of the above

Q: examples of indirect cost include the following (indicate all that apply): a. the inpatient nursing department b. the controllers office c. the grounds maintenance department d. the outpatient emergency department e. a & b f. b & c g. a & d

Q: a responsibility center report typically should show: a. controllable revenues b. controllable expenses he/she is responsible for c. both of the above

Q: indirect costs are for: a. the sole benefit of a particular operating unit b. the benefit of the overall operation c. neither of the above

Q: an expense that provides service directly related to patient care is generally called an __________ expense.

Q: in the case of non-profit organizations, does the outflow of expenses increase or decrease fund balance?

Q: a cost center is one form of __________ center.

Q: in healthcare organizations, it is not very common to find departments as cost centers.

Q: if an expense is recorded in the accounts payable account, it is then cleared from accounts payable when payment is made.

Q: disbursements for services will trigger payment only when the expense is incurred.

Q: the standard, traditional and consistent arrangement of expenses on medicare and medicaid cost reports has strongly influenced the arrangement of expense formats in many healthcare information systems.

Q: it is common to group expenses by either diagnoses or procedures for purposes of planning and control.

Q: an inflow of revenues increases equity, whereas the outflow of expenses decreases equity.

Q: examples of general services expense include: a. insurance and payroll taxes b. laundry and dietary c. both of the above d. neither of the above

Q: a general services expense: a. provides services necessary to maintain the patient, but the service is not directly related to patient care b. is necessary for support, but is neither directly related to patient care nor is it a service necessary to maintain the patient c. either of the above d. neither of the above

Q: certain organizations may also group their revenue-producing cost centers as follows: a. nursing services versus other professional services b. maintenance versus laundry c. support services versus security

Q: some organizations designate whether their cost centers are: a. located on campus versus located off campus b. revenue producing versus non-revenue producing c. none of the above

Q: examples of cost centers may include the: a. medical records division b. billing and collection office c. an individual security guards costs d. a & b e. a & c f. b & c g. all of the above

Q: if departments are designated as cost centers, reports are generally distributed as follows: a. the cost center manager receives the cost centers (departments) reports b. the director in charge of multiple cost centers receives a larger report c. the chief executive officer receives a total report of all cost centers d. all of the above e. none of the above

Q: if departments are designated as cost centers, it is logical because: a. the organizations lines of authority are typically organized by department b. departmental cost centers can then be grouped into larger groups that have something in common c. both of the above d. neither of the above

Q: depending upon the structure of the organization, a cost center might be: a. an office b. a division c. a department d. all of the above e. none of the above

Q: a particular unit of an organization that is given responsibility for controlling costs of the operations over which it holds authority is called a: a. cost center b. revenue center c. neither of the above

Q: drgs serve as the basic classification system for mdcs, or major diagnostic categories. a. correct b. not correct c. dont know

Q: a group of patients whose resource consumption is, on statistical average, equivalent: a. is termed a patient category b. is represented by a drg, or diagnosis-related group c. both of the above d. neither of the above

Q: drgs, or diagnosis-related groups are: a. part of the retrospective payment reimbursement methodology b. part of the prospective payment reimbursement methodology c. neither of the above

Q: grouping expenses by diagnoses and/or procedures for planning and control is especially useful because much of the revenue in many healthcare organizations is designated by either diagnoses or procedures. a. correct b. not correct c. not applicable

Q: grouping expenses by diagnoses for planning and control is beneficial because it: a. matches commonly used expense classifications against costs b. matches commonly used revenue classifications against costs c. either of the above d. neither of the above

Q: cost centers within the cost report are grouped into: a. three categories b. five categories c. seven categories d. none of the above

Q: the cost reports beginning trial balance consists of: a. three columns b. two columns c. five columns d. seven columns e. none of the above

Q: within cost reports, the cost center is: a. the same as a responsibility centers cost center that is used for planning and control b. a focus of the overall cost report methodology c. a type of cost pool used in the cost-finding process d. a & b e. a & c f. b & c g. none of the above

Q: within the cost report, the primary purpose of a cost center is to help: a. allocate overhead b. divide direct salaries into groups c. provide a distinction between inpatient and outpatient costs d. all of the above e. none of the above

Q: on the cost report, the central worksheets for cost finding are: a. worksheet a b. worksheet a-1 c. worksheet b d. worksheet b-1 e. worksheet e f. worksheets a, a-1 and b g. worksheets a, b and b-1 h. worksheets b and e

Q: expired costs will be matched against: a. current revenues b. future revenues c. either of the above d. neither of the above

Q: expenses represent: a. expenditures that flow into the organization b. expenditures that flow out of the organization c. neither of the above

Q: when operating expenses for an organization are (a) reduced to a rate per day and (b) compared with the amount in accounts payable, this computation: a. results in a figure known as days in accounts payable b. represents one measurement of operations within the organization c. both of the above d. neither of the above

Q: in most healthcare organizations, an expense is paid: a. at a later time, after the expense is incurred b. at the point where the expense is incurred c. neither of the above

Q: a narrower interpretation of the term expense: a. only considers expenses that are operating expenses b. disregards deductions from revenue c. groups expenses into categories d. all of the above e. none of the above

Q: the term expense: a. may include the amount of cash expended (or services performed) in consideration of goods or services received or to be received b. may include every expired cost that is deductible from revenue c. is interchangeable with the term cost d. all of the above

Q: expenses are the: a. costs of doing business b. costs that relate to earning revenue c. both of the above d. neither of the above

Q: expenses represent: a. the outflow from the business b. the inflow into the business c. a stream of expenditures that flow out of the organization d. a & b e. a & c f. b & c g. none of the above

Q: inpatient versus outpatient grouping of expenses: a: recognizes different sites at which services are delivered b. is a basic type of care setting grouping c. both of the above

Q: procedure codes, known as current procedural terminology (cpt) codes, are most commonly used to group cost centers for: a. inpatient services b. outpatient services c. both of the above

Q: expenses in their broadest sense are: a. both expired and unexpired costs b. expired costs consumed while carrying on business c. neither of the above

Q: revenue flows into the organization (inflow) and is sometimes referred to as the revenue __________.

Q: contractual allowances are the difference between the agreed-upon contractual rate that will be paid and the full __________.

Q: health maintenance organizations (hmos) and preferred provider organizations (ppos) are both revenue sources for many health care providers.

Q: private pay revenue is more prevalent in hospitals than in nursing facilities or assisted living facilities.

Q: when grouping accounts for planning or control, it is permissible to classify revenues by either service line or disease management category.

Q: if a certain method of grouping revenue for planning and control is generally accepted in other health care facilities, it is not strictly necessary for such a method to be consistent with the current structure of the facility where it is in use.

Q: it is not uncommon for different plans to pay different contractual rates for the same service.

Q: one method of grouping revenue is by revenue source. such grouping by revenue source may typically include the following: a. title xviii and title xix revenue b. private pay revenue c. hmo and ppo revenue d. commercial insurer and other revenue e. all of the above

Q: grouping revenue by care settings for planning and control recognizes: a. different sites at which services are delivered b. activities that are grouped by responsibility center c. similar services and groups them into service lines d. the most basic grouping of inpatient versus ambulatory services e. a & b f. b & c g. a & d

Q: payer mix: a. represents the various proportions of revenues that are realized from different types of payers b. is a measure often included in a healthcare organizations profile c. is called payer mix in part because the sources of healthcare revenue are typically called payers d. all of the above e. none of the above

Q: discounted fee for service contracts may include fee schedules. a. correct b. not correct c. not applicable

Q: sources of healthcare revenue in the united states include: a. a variety of public programs b. private payers c. certain governmental sources d. all of the above e. none of the above

Q: if a contractual agreement to pay for services uses varying assumptions about the group to be served: a. significant variation in such assumptions will affect the rates that are set for these services b. the use of such group assumptions indicates this is an agreement to pay before service is delivered c. the use of such group assumptions indicates this is an agreement to pay after service is delivered d. a & b e. b & c f. none of the above

Q: predetermined per-person payment received: a. is a payment method after the service is delivered b. generally consists of an amount received at the agreed-upon rate c. is typically a per-person count at a particular point in time d. a & b e. a & c f. b & c g. none of the above

Q: basic types of payment after service is delivered include: a. fee for service b. discounted fee for service c. predetermined per-person payment d. a & b e. a & c f. b & c

Q: the traditional payment method in health care is: a. payment before service is delivered b payment after contracts are negotiated c. payment after service is delivered d. none of the above

Q: whether payment is received before or after service delivery: a. often influences the amount of liabilities recorded b. is one way that expenses are classified c. often influences the amount of revenue received d. is one way that revenue is classified e. a & b f. c & d g. none of the above .

Q: if the full established rate for a procedure is $1,000 and the agreed-upon contractual rate to be paid is $800, then the $200 difference is recorded on the books of the organization as: a. a contractual allowance b. a discount c. neither of the above

Q: contractual allowances may be entered on the books of: a. hospitals b. physician offices c. both of the above d. not applicable