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
An ALF administrator wants to know the minimum occupancy needed to cover all costs. Which analysis should be performed?
Answer: Break-even analysis
Break-even analysis determines the census or revenue level at which total revenue equals total costs.
Which internal control best reduces the risk of embezzlement in the facility's business office?
Answer: Segregation of duties so no one person handles billing, collections, and reconciliation
Separating billing, cash handling, and reconciliation among different people prevents any single employee from concealing theft.
A prospective resident asks whether Medicare will pay for her assisted living room and board. The financially accurate answer is:
Answer: Medicare does not cover assisted living room and board costs
Medicare does not pay for assisted living room and board; payment typically comes from private funds, long-term care insurance, or Medicaid waivers in some states.
Labor typically represents what portion of an assisted living facility's operating expenses?
Answer: The largest single expense category, often around half or more
Staffing is normally the largest operating cost in assisted living, commonly 50% or more of total operating expenses.
The facility's current ratio is 0.7. What does this indicate?
Answer: Current liabilities exceed current assets, signaling potential short-term liquidity problems
A current ratio below 1.0 means current assets are insufficient to cover current liabilities, indicating liquidity risk.
When negotiating a group purchasing organization (GPO) contract for supplies, the administrator's primary financial goal is to:
Answer: Leverage combined buying volume to lower unit costs
GPOs pool purchasing volume from many facilities to negotiate lower prices than a single facility could obtain alone.
A budget that automatically adjusts expense targets based on actual occupancy levels is called a:
Answer: Flexible budget
A flexible budget recalculates expected costs at different activity levels, making variance analysis fairer when census fluctuates.