CALA CALA Financial Management & Budgeting 1 — Questions and Answers
Question 1: Which budget type projects revenues and expenses for a specific future period in an assisted living facility?
- Operating budget (Correct answer)
- Capital budget
- Cash flow budget
- Zero-based budget
Correct answer: Operating budget
An operating budget projects day-to-day revenues and expenses for a defined period, typically one fiscal year.
Question 2: What is the primary source of revenue for most US assisted living facilities?
- Medicare reimbursements
- Private pay resident fees (Correct answer)
- Medicaid waiver payments
- Long-term care insurance
Correct answer: Private pay resident fees
Private pay resident fees are the primary revenue source for most assisted living facilities, as Medicare generally does not cover assisted living costs.
Question 3: Which financial statement shows an assisted living facility's assets, liabilities, and equity at a specific point in time?
- Income statement
- Cash flow statement
- Balance sheet (Correct answer)
- Accounts payable report
Correct answer: Balance sheet
The balance sheet provides a snapshot of a facility's financial position, listing assets, liabilities, and owners' equity at a specific date.
Question 4: In assisted living financial management, what does 'census' refer to?
- Staff headcount
- Number of occupied resident beds (Correct answer)
- Monthly expense total
- Government inspection count
Correct answer: Number of occupied resident beds
Census refers to the number of occupied resident beds or units at a given time, directly impacting revenue calculations.
Question 5: A CALA administrator notices accounts receivable aging past 90 days. What is the most appropriate first action?
- Write off the debt immediately
- Contact the responsible party to arrange payment or a payment plan (Correct answer)
- Discharge the resident
- Reduce resident services
Correct answer: Contact the responsible party to arrange payment or a payment plan
The administrator should first contact the responsible party to discuss outstanding balances and arrange payment or a structured payment plan.
Question 6: Which cost is considered a fixed expense in an assisted living facility budget?
- Dietary supplies based on census
- PRN medication costs
- Monthly building lease payment (Correct answer)
- Overtime labor during high census
Correct answer: Monthly building lease payment
A monthly building lease payment remains constant regardless of census or service volume, making it a fixed expense.
CALA CALA Financial Management & Budgeting 1
Which budget type projects revenues and expenses for a specific future period in an assisted living facility?