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 prospective resident asks about additional charges beyond base rent. Under most state ALF regulations and consumer protection standards, the administrator must do what?
Answer: Disclose all fees and charge policies in writing before admission
Full written disclosure of rates, fees, and increase policies before admission is a standard regulatory and ethical requirement.
Which metric best measures how quickly a facility converts its billed charges into cash?
Answer: Days in accounts receivable
Days in accounts receivable measures the average time between billing and payment collection.
A tiered pricing model in assisted living means residents are charged based on what?
Answer: Their assessed level of care needs
Tiered pricing assigns residents to care levels based on assessed needs, with higher tiers charged more.
During the fiscal year, a facility's revenue drops due to unexpected vacancies. Which budget type automatically adjusts expense targets to the actual activity level?
Answer: Flexible budget
A flexible budget recalculates expected costs at the actual census level, making variance analysis more meaningful.
Which practice best protects a facility against theft in petty cash handling?
Answer: Requiring receipts and periodic reconciliation by someone other than the custodian
Documented receipts plus independent reconciliation create accountability over petty cash.
A facility's debt service coverage ratio falls below the minimum required by its lender's loan covenant. What is the most likely consequence?
Answer: The lender may declare the loan in technical default and impose remedies
Violating a loan covenant can trigger technical default, allowing the lender to demand corrective action or accelerate the loan.
When forecasting next year's revenue, which combination of factors should an ALF administrator weigh most heavily?
Answer: Projected occupancy, care-level mix, and planned rate increases
Revenue is driven by how many residents are served, their care acuity mix, and the rates charged.