Finance and Accounting

Question 1

finance vs. accounting

Answer 1

finance: money management

Accounting: providing financial information

Question 2

what does 70% of expenses in healthcare come from/

Answer 2

paying the employee

Question 3

Accounts receivable correlates with what?

Answer 3

revenues: the dollars and cents accrued from doing business

Question 4

Accounts payable correlates with what?

Answer 4

expenses: the cost of doing business

Question 5

What are three major sources of revenue/accounts receivable?

Answer 5

cash based services

insurance based services

contracted services

Question 6

definition of direct costs

Answer 6

it is directly tied to the good or service

Question 7

definition of indirect costs

Answer 7

something needed for the delivery of the good or service but not directly the service

Question 8

What are the two main direct costs that you incur?

Answer 8

Salaries and equipment!

Question 9

What are some examples of indirect costs

Answer 9

rent
electric
overhead

Question 10

total cost = what other three factors?

Answer 10

fixed cost + variable cost + semi-variable costs

Question 11

What is the definition of a semi-variable cost?

Answer 11

something that has both a fixed and variable cost (cell phone with data)

Question 12

in rehab cost is associated with a what?

Answer 12

unit of service; this 1 unit changes based on the setting you’re practicing in

Question 13

total cost = _____ + ______

Answer 13

total cost = fixed cost + variable cost

Question 14

average cost = ______/______

Answer 14

average cost = total cost/volume

Question 15

marginal cost = ______/_______

Answer 15

marginal cost = change in total cost/change in volume

Question 16

As the volume of visits increases the _______ _____ __ _____goes down

Answer 16

As the volume of visits increases the AVERAGE COST OF VISITS goes down

Question 17

The average cost diminishes the more _______ you provide

Answer 17

The average cost diminishes the more UNITS OF SERVICE yo . provide

Question 18

Explain break even analysis

Answer 18

finding the specific volume at which a business neither makes nor loses money

Question 19

Break even analysis = _____ + ______

Answer 19

break even analysis;

expenses = revenues

Question 20

Break even quantity = _____/(____-_____)

Answer 20

break even quantity = fixed cost/ (price-variable cost per UOS)

Question 21

what is the process of identifying, recording, summarizing and reporting in monetary terms, information about an organization during a specific period of time

Answer 21

accounting

Question 22

Foundation for accounting information systems within an organization is called what?

Answer 22

chart of accounts

Question 23

Payments that come in are called what?

Answer 23

assets

Question 24

What is owed to the business is called accounts ______

Answer 24

receivable

Question 25

When a financial event (transaction) happens, it is posted in a ledger in two places/double entry. What are they?

Answer 25

Increase in entities cash account Decrease in accounts receivable (what is owed to the business)

Question 26

______ are economic resources that are owned by a business and are expected to benefit future operations

Answer 26

assets

Question 27

``` Intentories Accounts receivables capital assets cash investments ``` are all what?

Answer 27

Assets! If you went under today what could you liquidate in order to get money

Question 28

liabilities = ______

Answer 28

debts

Question 29

total liabilities (debts) make up the amount of the organizations _____ owed by its creditors

Answer 29

assets

Question 30

Accounts payable Accrued expenses notes payable are all what?

Answer 30

liabilities

Question 31

balance sheet lists what three things

Answer 31

assets liabilities owners equity

Question 32

Balance sheet tell us _______ ______

Answer 32

net worth/owner's equity

Question 33

Owner's equity = ______ - ________

Answer 33

Owners equity (net worth) = assets - liabilities

Question 34

net worth is also called what?

Answer 34

owners equity

Question 35

Assets = ______ + ______

Answer 35

assets = net worth + liabilities

Question 36

What are the four core fundamental financial statements?

Answer 36

- balance sheet - income statement - cash flow statement - retained earnings statement

Question 37

What are financial statements?

Answer 37

reports presenting summative information about an organizations revenues and expenses in a standard format

Question 38

what can be used to compare past and current performance?

Answer 38

financial statements Each statement is interrelated so together they are used to view the financial health, stability and growth potential of an organization as well

Question 39

What is a red flag in financial analysis?

Answer 39

variances: they need to be looked at more closely for their cause

Question 40

which of the four fundamental financial statements shows how an organization's cash position changes overtime?

Answer 40

Cash flow statement: shows where you're at at any given point in time with the cash you have on hand

Question 41

Which one of the four fundamental financial statements would you look at if you wanted to know how much money you have on hand to cover short term liabilities?

Answer 41

cash flow statement

Question 42

Accounts receivable or payable? What you think you'll be paying out

Answer 42

accounts payable

Question 43

Which one of the four fundamental financial statements would you look at if you wanted to know details on how owner's equity changed?

Answer 43

retained earnings statement

Question 44

Which one of the four fundamental financial statements would you look at if you wanted to know how profits are used in a business?

Answer 44

retained earnings statement: tells you if profits are distributed to the owners or reinvestied into the business

Question 45

what is another name for the retained earnings statement?

Answer 45

owner's equity statement

Question 46

Which one of the four fundamental financial statements is a report of an organization's financial performance over a specific period of time?

Answer 46

income statement: compares monies earned (revenues) to monies spend (expenses)

Question 47

income statement compares what two things? and what does the difference btwn them give you

Answer 47

revenues to expenses. The difference btwn the two give you net income or loss from operations

Question 48

profit and loss statements statement of operations are alternate names for which of the four fundemental financial statements?

Answer 48

income statements

Question 49

Which one of the four fundamental financial statements would you look at to know the "health status" of a business?

Answer 49

income statement

Question 50

Explain when the contribution margin shows a loss ______ exceeds _____

Answer 50

expenses exceed revenues = loss

Question 51

Explain when the contritubition margin shows a profit _____ exceeds _____

Answer 51

revenues exceed expenses = profit

Question 52

revenues = cost is called what point?

Answer 52

break even point

Question 53

revenue is _____ income

Answer 53

gross income: meaning before anything is taken out or paid

Question 54

how is revenue (gross income) normally generated?

Answer 54

number of minutes of service, codes for op etc.

Question 55

Contribution margin = ________ - _______

Answer 55

contribution margin = revenues - expenses

Question 56

Charge 160 for a visit and you have contractural allowance of 80% of charges what is the revenue?

Answer 56

160(.80)

Question 57

If revenue is 96 dollars and you spend 50 dollars in money for an individuals visit, what is the contribution margin?

Answer 57

46 dollars

Question 58

Operating income = contribution margin - allocated expenses

Answer 58

if you have 46 dollars as your contribution margin, and then have 20 dollars allocated expenses, the operating income is actually only 26$

Question 59

Operating income concept

Answer 59

your contribution margin has to still be positive when you take into account costs that happen no mater if you continue doing business or not (marketing etc). You have to be able to continue to help the organization as the whole.

Question 60

A ______ is a financial statement that estimates income and expenditures for specified future time periods

Answer 60

budget

Question 61

Name the three things that generally happen when creating a budget

Answer 61

scan environment identify goals and objectives complementary to the organizations plan, policies etc. gather data on estimated costs and revenues

Question 62

what is the goal of revenue management?

Answer 62

maximize income from operations and investments

Question 63

setting prices identifying the payer for each service or product policies and procedures that address the provision of the service, recording delivery of the service and collecting reimbursement estimating expected payment following procedures for payment receipt Financial reporting are all ways to manage what?

Answer 63

revenue management

Question 64

net revenue/1 visit = what?

Answer 64

total revenue/total number of visits

Question 65

ADC is what and part of what in finance

Answer 65

average daily census; very important for revenue management

Question 66

name the 6 things that are super important for revenue management

Answer 66

10 volume/average daily census arrival rate Units/units per visit case mix conversion rate (net revenue as % of charges) total revenue

Question 67

arrival rate = _________/______

Answer 67

arrival rate = scheduled visits/actual visits

Question 68

conversion rate, part of revenue management, is what?

Answer 68

net revenue as % of charges; you have different contractural allowances, based on your case mix you'll have multiple payors so this looks at everything as a whole.

Question 69

what is the goal of expense management

Answer 69

maximizing NET income

Question 70

define operating expenses

Answer 70

cost of resources to produce the organizations serves and goods in a limited time period

Question 71

define capital expenses

Answer 71

big-ticket, long lasting items

Question 72

what are most of your expenses in healthcare coming from?

Answer 72

70% is employees!

Question 73

what is a super important thing to look at with expense management?

Answer 73

management of employees! 70% of expenses in healthcare come from here

Question 74

influencing the utilization of mixed or variable cost items is part of what piece of management?q

Answer 74

expense management

Question 75

1 FTE = how many hrs per week?

Answer 75

40

Question 76

productivity is defined as what

Answer 76

how many hours are they able to bill for based on how many hours they're available for in a year (have to get available productive hours first and then determine 6-8 hours a day should be billable time)

Question 77

what are the four KPI's we talked about?

Answer 77

volume: referrals, ADC net revenues: as % of charge, as well as per visit expenses/costs: labor cost per UOS and non labor costs per UOS efficiency: productivity, total paid hours per UOS