Financial Management & 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 & Budgeting flashcards as text
Which of the following is a fixed cost for an assisted living facility?
Answer: Property insurance premiums
Property insurance stays constant regardless of census, while food, supplies, and agency staffing vary with resident count.
A facility charges a base rate plus tiered fees for additional care levels. This pricing model is best described as:
Answer: Levels-of-care pricing
Levels-of-care pricing sets a base rate with tiered add-ons based on assessed care needs.
An administrator preparing next year's budget expects a 4% wage increase and a 3% supply cost increase. Which forecasting approach is being used?
Answer: Incremental budgeting adjusted for known cost trends
Adjusting prior-year figures upward by expected percentage changes is incremental (trend-based) budgeting.
Which metric best measures how efficiently an ALF converts its available units into revenue?
Answer: Revenue per occupied unit combined with occupancy rate
Revenue per occupied unit and occupancy rate together show both pricing effectiveness and how fully capacity is utilized.
A resident's private funds are held by the facility. Which financial practice is required to protect those funds?
Answer: Maintaining them in a separate account with individual accounting, never commingled with facility operating funds
Resident trust funds must be kept separate from operating funds with individual records to prevent commingling and misappropriation.
Which scenario represents a cash flow problem rather than a profitability problem?
Answer: The facility is profitable on paper but cannot pay vendors because receivables are collected slowly
Slow collections can leave a profitable facility short of cash to meet obligations, which is a timing issue rather than an earnings issue.
Depreciation expense on the facility's building primarily affects the budget by:
Answer: Allocating the building's cost over its useful life as a non-cash expense
Depreciation spreads an asset's cost over its useful life and reduces reported income without requiring a cash outlay.