Financial Management and Budgeting Flashcards
7 cards from real ALF practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Budgeting flashcards as text
A facility administrator discovers an employee has been both approving invoices and signing checks. What internal control principle is being violated?
Answer: Segregation of duties
Segregation of duties requires that no single person control multiple stages of a financial transaction, reducing fraud risk.
Which of the following best describes 'break-even occupancy' for an assisted living facility?
Answer: The census level at which total revenue equals total expenses
Break-even occupancy is the census at which revenues exactly cover all fixed and variable costs.
An administrator handling residents' personal funds in a trust account must do which of the following?
Answer: Keep resident funds separate from facility operating accounts
Resident trust funds must be kept separate from facility funds and properly accounted for to each resident.
Which payer source typically covers assisted living services for eligible low-income residents in states with home and community-based services waivers?
Answer: Medicaid
Medicaid HCBS waivers can cover assisted living care costs for eligible residents, while Medicare generally does not pay for assisted living.
A facility purchases a new passenger van for $60,000 with an expected useful life of 10 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
Answer: $6,000
Straight-line depreciation divides cost minus salvage value by useful life: $60,000 / 10 = $6,000 per year.
What is the primary purpose of a facility's operating budget?
Answer: To plan and control day-to-day revenues and expenses for the fiscal year
The operating budget is a forward-looking plan for routine revenues and expenses used to guide and control spending.
An administrator reviewing monthly financials sees labor costs at 65% of revenue when the industry benchmark is 55%. What is the most reasonable next action?
Answer: Analyze staffing schedules, overtime, and agency usage against census and acuity
High labor ratios call for analysis of scheduling, overtime, and agency staffing relative to resident needs before any cuts.