Chapter 10

Question 1

Capital budget

Answer 1

summarizes the anticipated major purchases for the year

Question 2

Cash budget

Answer 2

displays all of the organization’s projected cash inflows and outflows (bottom line is the amount of cash available at end of period)

Question 3

Expense budget

Answer 3

a subset of the operating budget that is a forecast of the operating expenses that will be incurred during the current budget period

Question 4

Fixed supplies budget

Answer 4

a subset of the supplies budget that covers items that do not vary with volume

Question 5

Flexible budget

Answer 5

a budget that accommodates a range or multiple levels of activities

Question 6

Group purchasing organization

Answer 6

a network of health care organizations and a third-party vendor that acquires large volumes of supplies from manufacturers at negotiated discounted rates

Question 7

Multi-year budget

Answer 7

a budget that is forecast multiple years ahead, rather than just the upcoming year

Question 8

Operating budget

Answer 8

composed of the revenue budget and expense budget

Question 9

Revenue budget

Answer 9

a subset of the operating budget that is forecast of the operating revenues that will be earned during the current budget period

Question 10

Four major budgets of a health care organization

Answer 10

statistics budgets, operating budgets, cash budgets, and capital budgets

Question 11

Purpose of budgeting

Answer 11

to illustrate the revenues and resources an organization will need to achieve its goals and objectives

Question 12

Four major components of budgeting

Answer 12

Strategic Planning
Planning
Implementation
Controlling