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 notices that actual food service costs exceeded the budgeted amount by 12% this quarter. What is the most appropriate first step?
Answer: Perform a variance analysis to identify the cause
Variance analysis identifies whether the overage stems from price increases, census changes, waste, or other causes before corrective action is taken.
Which budgeting method requires every expense line to be justified from a zero base each budget cycle, rather than adjusting prior-year figures?
Answer: Zero-based budgeting
Zero-based budgeting starts each line at zero and requires justification for all expenditures, unlike incremental budgeting which adjusts prior-year amounts.
In an assisted living facility, the purchase of a new commercial washer expected to last 10 years should appear in which budget?
Answer: Capital budget
Long-lived, high-cost assets like commercial equipment are planned through the capital budget, not the operating budget.
A facility's occupancy drops from 92% to 80%. Which financial effect is most immediate?
Answer: Reduced revenue while fixed costs remain largely unchanged
Occupancy declines cut revenue immediately, but fixed costs like debt service and insurance do not fall with census.
Which financial statement shows an assisted living facility's revenues and expenses over a specific period, resulting in net income or loss?
Answer: Income statement
The income statement (profit and loss statement) reports revenues minus expenses over a period to show net income or loss.
Accounts receivable aging reports are primarily used by an ALF administrator to:
Answer: Track how long resident balances have gone unpaid
An aging report categorizes unpaid receivables by time outstanding, helping administrators prioritize collections and spot payment problems early.
Under accrual accounting, when should an ALF record revenue for services provided to a resident in June but paid in August?
Answer: In June, when the service was provided
Accrual accounting recognizes revenue when it is earned, not when cash is received.