General

Question 1

The majority of money you make should go into what?

Answer 1

operations

Question 2

3 fundamental accounting principles:

Answer 2

• obtaining financing
• making investments
• conducting profitable operation

Question 3

3 legal structures for companies:

Answer 3

• sole proprietorship
• partnership
• corporation

Question 4

3 basic financial statements:

Answer 4

• balance sheet
• income statement
• statement of cash flows

Question 5

States that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported

Answer 5

periodicity concept

Question 6

the time period for which accounts are prepared; usually one calendar year or fiscal year (e.g., July 1 through June 30

Answer 6

accounting period

Question 7

organization’s activities can be divided into specific time periods (e.g., quarters); allows for preparation of interim financial statements

Answer 7

time period principle

Question 8

requires that revenue and expenses are recorded in the period in which they are earned or incurred regardless of whether cash is received or disbursed in that period

Answer 8

accrual basis accounting

Question 9

recording revenue and expenses in the period they are

actually received or expended

Answer 9

cash basis accounting

does not conform to GAAP

Question 10

Assets =

Answer 10

liabilities + equity

Question 11

Equity =

Answer 11

assets - liabilities

Question 12

Itemized statement that lists total assets and total liabilities of a company

Answer 12

balance sheet

shows net worth at any moment in time

Question 13

If total assets $122,000, and total liabilities are $21,000, what is the equity?

Answer 13

$101,000

Assets - liabilities = equity

Question 14

Net income =

Answer 14

revenues - expenses

Question 15

Income statement is also called what?

Answer 15

P and L statement

Question 16

Records the company’s revenues and expenses for a specific period of time

Answer 16

income statement

Question 17

What type of balance sheets are reduced to zero balance at end of each period?

Answer 17

temporary accounts

ex. revenue accounts, expense accounts

Question 18

How are statement of cash flows dated?

Answer 18

“for the period ended” of a specific date

May be used as an analytical tool to assess short-term viability of a company

Question 19

What kind of analysis can be used to assess a company’s performance?

Answer 19

ratio analysis

Question 20

How is a financial ratio computed?

Answer 20

by dividing one financial statement item by another

Allows users to evaluate company performance by focusing on specific relationships between items on the balance sheet and income statement

Question 21

break even quantity =

Answer 21

total fixed costs/(price - variable cost per unit)

Question 22

What solvency ratio is most important in inventory management?

Answer 22

inventory turnover

cost of good sold/avg. inventory

Question 23

Average inventory =

Answer 23

(beginning inventory account balance + ending balance) / 2

Question 24

What inventory turnover is optimal in community pharmacy?

Answer 24

12

Question 25

5 functions of a budgeting system: PFACE

Answer 25

P - planning F - facilitating communication/coordination A - allocating resources C - controlling profit/operations E - evaluating performance/providing incentives

Question 26

What type of budget is a projection of expected revenue and expenses established for a set period of time?

Answer 26

pro forma

Question 27

What type of budget is based on a particular time frame and continuously updated?

Answer 27

rolling

Question 28

What kind of budget is used for large dollar items, and allows for allocation of money for larger cost items?

Answer 28

capital budget ex. to upgrade computer systems

Question 29

Which type of budget includes sales, operations, production, financial statements, and allows for a more holistic picture?

Answer 29

master budget

Question 30

Which includes payments from pts and may not always match budgeted sales b/c it takes time to receive payment? cash receipts, cash disbursements, cash

Answer 30

cash receipts

Question 31

Two stage cost assignment process:

Answer 31

- resource costs assigned to activities | - overhead costs assigned to cost objects

Question 32

Is medicare part D a third party payer?

Answer 32

yes >= 65yo, ESRD, disabled individuals

Question 33

Are PBMs third party payers?

Answer 33

yes

Question 34

published catalog price

Answer 34

wholesale acquisition cost (WAC)

Question 35

What price is used when pharmacies buy directly from manufacturer?

Answer 35

average manufacturers price (AMP)

Question 36

average suggested list price for wholesalers

Answer 36

AWP

Question 37

actual amount pharmacy paid supplier for goods

Answer 37

actual acquisition cost (AAC)

Question 38

Max cost that third party will be willing to pay for any debt

Answer 38

maximum allowable cost (MAC) Medicaid and Medicare have caps on what they will pay for certain drugs

Question 39

Third party payment =

Answer 39

product cost + dispensing fee - pt cost share

Question 40

What kind of risk management involves using knowledge and experience to manage risks within a business or organizational environment such as a pharmacy?

Answer 40

enterprise risk Requires assessing pharmacy operations as a whole to determine areas of potential risk and implementing strategies or practices to manage these risks

Question 41

5 risk management steps IPSIM

Answer 41

- identify risks - prioritize risks - select techniques to manage risks - implement plan - monitor/assess

Question 42

Risk can be prioritized according to:

Answer 42

- frequency - severity - time to probable impact and warning

Question 43

4 techniques to manage risks:

Answer 43

- elimination - avoidance - transference - reduction

Question 44

2 ways to transfer risk:

Answer 44

- indemnification | - insurance

Question 45

When are incident/error reports protected?

Answer 45

if they are reported to the pharmacy's PSO

Question 46

What act allows for near miss/error data to be used for business purposes?

Answer 46

Patient Safety and Quality Improvement Act

Question 47

What page of insurance packet states limits for coverage, and shows limits for special coverages?

Answer 47

declarations page

Question 48

2 main insurance policy forms written by:

Answer 48

- insurance services office (ISO) | - American Association of Insurance Services (AAIS)

Question 49

What part of insurance packeting contains important provisions for interrupting the policy?

Answer 49

common policy - change, modification, waiver of policy terms - conformity with statute - cooperation - liberalization

Question 50

What insurance section contains a list of definitions that apply to all coverages throughout the policy?

Answer 50

common policy conditions

Question 51

Are leased workers covered under commercial liability coverage?

Answer 51

yes temporary workers are not

Question 52

4 coverages provided by commercial liability policies:

Answer 52

- bodily injury/property damage - personal/adverstising injury - medical payments - fire legal liability

Question 53

Property damage in bodily injury and property damage refers to damage to third party or first party property?

Answer 53

third party

Question 54

Property damage in the property coverages section refers to damage to third party or first party property?

Answer 54

first party

Question 55

Are professional claims arising out of rendering or failure to render a service covered under bodily injury and property damage liability?

Answer 55

no

Question 56

Insurance medical payments coverage is usually limited to no more than what amount?

Answer 56

$10,000

Question 57

Fire legal liability coverage is usually limited to less than what amount?

Answer 57

$100,000

Question 58

Is professional liability or malpractice coverage included under AAIS commercial policy?

Answer 58

no Advantage as it allows specialized coverage to be crafted for the pharmacy professional risk and added by way of endorsement

Question 59

What are difference in two types of professional liability coverage?

Answer 59

not price, but in language and degree of sophistication - generalized - specialized

Question 60

What kind of policy will usually define coverage as “the practice of pharmacy” and be construed according to the definition found in the state’s pharmacy practice act and the state board of pharmacy regulations?

Answer 60

generalized policy professional liability coverage

Question 61

What kind of policy will usually define coverage as “pharmacy services,” followed by paragraphs detailing practices/services?

Answer 61

specialized policy professional liability coverage

Question 62

2 basic types of liability insurance policies:

Answer 62

- claims made | - occurrence

Question 63

extends incident reporting period with old insurance company for one to three years beyond policy cancellation date

Answer 63

tail coverage claims-made coverage

Question 64

Makes up the difference between primary policy coverage and the remaining amount when the primary policy limit is reached

Answer 64

umbrella coverage Comes into play when coverage limits of a primary policy have been exceeded

Question 65

What company provides Best’s Insurance Reports, which lists ratings of most insurance companies in the U.S?

Answer 65

A.M Best Company

Question 66

3 factors analyzed to determine when an individual is an employee or independent contractor:

Answer 66

- degree of behavioral control - degree of financial control - relationship between parties

Question 67

The Age Discrimination in Employment Act (ADEA) protects those over age?

Answer 67

40

Question 68

What protects against discrimination based on race, religion, etc?

Answer 68

title VII of civil rights act

Question 69

If an employer searches the internet for information about job candidates, could it violate qual opportunity mandates?

Answer 69

yes

Question 70

For employment contracts over one year many states require it to be in writing b/c of what statute?

Answer 70

statutes of fraud

Question 71

What act requires all employees to be paid at least the fed minimum wage?

Answer 71

fair labor standards act (FLSA) 1938

Question 72

Does a plaintiff have to prove psychological injury to prove hostile environment sexual harassment?

Answer 72

no

Question 73

Where no tangible employment action occurs, employer can avoid liability by raising an _____ defense

Answer 73

affirmative

Question 74

Requires student educational records to be accurate and bars the release of student information unless authorized by the student

Answer 74

FERPA 1974

Question 75

_____ is a cause of action that former employees use to challenge a negative reference that results in individual not getting a sought-after position

Answer 75

defamation

Question 76

5 parts of employee value proposition:

Answer 76

- affiliation - work content - career - benefits - compensation

Question 77

____ statements should describe the culture that an employee can expect to encounter within an organization

Answer 77

values

Question 78

3 primary factors in perception of fairness:

Answer 78

- degree of employee input in decision making - how decisions are made - how managers behave

Question 79

Limitations to work schedule w caused by:

Answer 79

- organizational structure - work environment - nature of the work

Question 80

Benefits are ___ % of pharmacist total compensation?

Answer 80

25-35