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LSUS MHA 706 MIDTERM EXAM STUDY
GUIDE 2024 | FINANCIAL MANAGEMENT
MIDTERM | QUESTIONS AND CORRECT
ANSWERS | LATEST VERSION |
ALREADY GRADED A+
healthcare finance -------------------------------the accounting and financial management principles and practices used within health services organizations to ensure the financial well-being of the enterprise healthcare sector -------------------------------consists of a diverse collection of industries that involve the healthcare of the population provider -------------------------------an organization that provides healthcare services business -------------------------------maintains financial viability by selling goods or services pure charity -------------------------------relies solely on contributions finance -------------------------------consists of both accounting and financial management functions primary role of finance -------------------------------to plan for, acquire, and use resources to maximize the efficiency and value of the enterprise
accounting -------------------------------concerns the recording of economic events that reflect the operations, resources, and financing of an organization financial management -------------------------------provides the theory, concepts, and tools necessary to help managers make better financial decisions planning and budgeting -------------------------------involves evaluating the financial effectiveness of current operations and planning for the future financial reporting -------------------------------recording and reporting to outsiders the results of operations and current financial status capital budgeting -------------------------------the process of analyzing and choosing new fixed assets financing decisions -------------------------------all organizations must raise capital to buy the assets necessary to support operations working capital management -------------------------------a managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other contract management -------------------------------the process of managing contract creation, execution and analysis to maximize operational and financial performance at an organization, all while reducing financial risk financial risk management -------------------------------the practice of economic value in a firm by using financial instruments to manage exposure to risk, particularly credit risk and market risk
general acute care hospitals -------------------------------provide general medical and surgical services and selected acute specialty services tertiary care -------------------------------highly specialized and technical in nature, with services for patients with unusually severe, complex, or uncommon problems governmental hospitals -------------------------------federal and public entities federal hospitals -------------------------------operated by military services or the US Department of Veterans Affairs public hospitals -------------------------------funded wholly or in part by a city, county, tax district, or state private not-for-profit hospitals -------------------------------nongovernmental entities organized for the sole purpose of providing inpatient healthcare services investor-owned corporations -------------------------------a for-profit business whose capital is supplied by owners not-for-profit corporations -------------------------------a corporation that has a charitable purpose, is tax exempt, and has no owners third-party payer -------------------------------an entity other that the patient that pays for healthcare services
ambulatory or outpatient care -------------------------------encompasses services provided to non institutionalized patients long-term care -------------------------------healthcare services that cover an extended period of time, often with a focus on mental health skilled nursing facilities -------------------------------provide the level of care closest to hospital care intermediate care facilities -------------------------------intended for individuals who do not require hospital or SNF care but whose mental or physical conditions require daily continuity of one or more medical services residential care facilities -------------------------------sheltered environments that do not provide professional healthcare services integrated delivery system -------------------------------a single organization that offers a broad range of healthcare services in a unified manner licensure -------------------------------the granting or regulation of licenses, as for professionals certificate of need -------------------------------An endorsement required by numerous states before the construction of a new health care facility will be approved professional liability -------------------------------protects professionals such as accountants, lawyers and physicians against negligence and other claims initiated by their clients
primary market -------------------------------the market in which newly issued securities are sold for the first time secondary market -------------------------------the market in which previously issued securities are sold publicly held company -------------------------------a corporation whose shares are held by the general public privately held company -------------------------------shares are held by a small number of individuals, usually the managers stockholders -------------------------------owners of investor-owned corporations board of directors -------------------------------oversees the management of the company proxy -------------------------------a document giving one person the authority to act for another - typically the power to vote shares of common stock residual earnings -------------------------------any excess of revenues over expenses dividend -------------------------------the periodic payment paid to owners of common and preferred stock form 990 -------------------------------a form filed by not-for-profit organizations with the IRS that reports on governance and charitable activities
schedule H -------------------------------an attachment to form 990 filed by not-for-profit hospitals that gives additional information on charitable activities shareholder wealth maximization -------------------------------stock price maximization agency problem -------------------------------a conflict of interest that can arise between principals and agents Medicare -------------------------------a federal government health insurance program that provides benefits to individuals aged 65 or older Medicaid -------------------------------a federal and state government health insurance program that provides benefits to low-income individuals managed care plans -------------------------------strive to combine the insurance function and the provision of healthcare services health maintenance organization ------------------------------- fee-for-service -------------------------------a reimbursement methodology that provides payment each time a service is provided capitation -------------------------------a reimbursement methodology that is based on the number of covered lives as opposed to the amount of services provided cost-based reimbursement -------------------------------a reimbursement methodology based on the costs incurred in providing services
Healthcare Common Procedure Coding System (HCPCS) -------------------------------a medical coding system that expands the CPT codes to include nonphysician services durable medical equipment healthcare reform -------------------------------generic term used to describe the actions taken by Congress in 2010 to transform the healthcare system accountable care organization (ACO) -------------------------------a method of integrating physicians with other healthcare providers with a goal of controlling costs and improving quality medical home -------------------------------team-based model of care led by a personal physician who provides continuous and coordinated care throughout a patient's lifetime to maximize health outcomes financial accounting -------------------------------the field of accounting that focuses on the measurement and communication of the economic events and status of an entire organization Securities and Exchange Commission (SEC) -------------------------------the government agency that regulates the sale of securities and the operations of securities exchanges Financial Accounting Standards Board (FASB) -------------------------------private organization whose mission is to establish and improve the standards of financial accounting and reporting for private businesses American Institute of Certified Public Accountants (AICPA) -------------------------------the professional association of public accountants
generally accepted accounting principles (GAAP) -------------------------------the set of guidelines that has evolved to guide the preparation and presentation of financial statements goal of financial accounting -------------------------------provide information about organizations that is useful to present and future investors and other users in making rational financial and investment decisions accounting entity -------------------------------the entity for which a set of accounting statements applies going concern -------------------------------the assumption that a company or other entity will be able to continue operating for a period of time that is sufficient to carry out its commitments, obligations, objectives, and so on accounting period -------------------------------the period covered by a set of financial statements fiscal year -------------------------------the year covered by an organization's financial statements monetary unit -------------------------------provides the common basis by which economic events are measured historical costs -------------------------------in accounting, the purchase price of an asset revenue recognition principle -------------------------------the concept that revenues must be recognized in the accounting period when they are realizable and earned
transaction -------------------------------an exchange of goods or services from one individual or enterprise to another chart of accounts -------------------------------document that assigns a unique numerical identifier to every account of an organization general ledger -------------------------------the master listing of an organization's primary accounts double entry system -------------------------------the system used to make accounting journal entries annual report -------------------------------report issued annually by an organization to its stakeholders that contains descriptive information and historical financial statements income statement -------------------------------financial statement, prepared in accordance with GAAP that summarizes a business's revenues, expenses, and profitability revenues -------------------------------monies collected or expected to be collected by the business expenses -------------------------------economic costs associated with the provision of services depreciation -------------------------------noncash charge against earnings on the income statement that reflects the "wear and tear" on a business's fixed assets
investment income -------------------------------reports the earnings on securities investments as opposed to the patient services operating income -------------------------------the earnings of a business directly related to core activities nonoperating income -------------------------------the earnings of a business that are unrelated to core activities net income -------------------------------represents the total economic profitability of a business as defined by GAAP statement of changes in equity -------------------------------financial statement that reports how much of a business's income statement earnings flows to the balance sheet equity account total profit margin -------------------------------measures the amount of total profit per dollar of total revenues operating margin -------------------------------measures the amount of operating profit per dollar of operating revenues and focuses on the core activities of a business balance sheet -------------------------------financial statement that lists a business's assets, liabilities, and equity accounting identity -------------------------------specifies that assets must equal liabilities plus equity
credit terms -------------------------------the statement of terms that extends credit to a buyer trade credit -------------------------------the credit offered to businesses by suppliers when credit terms are offered accrued expenses -------------------------------business liability that stems from the fact that some obligations, such as wages and taxes, are not paid immediately after the obligations are created net assets -------------------------------in not-for-profit businesses, the term often used in place of equity retained earnings -------------------------------the portion of net income that is retained within the business as opposed to paid out as dividends par value -------------------------------the face value of a security fund accounting -------------------------------a system for recording financial statement data that categorizes accounts as restricted or unrestricted statement of cash flows -------------------------------a financial statement that focuses on the cash flows that come into and go out of a business debt ratio -------------------------------a debt utilization ratio that measures the proportion of dent financing
managerial accounting -------------------------------the field of accounting that focuses primarily on subunit data used internally for managerial decision making fixed cost -------------------------------a cost that is not related to the volume of services delivered variable cost -------------------------------costs that are expected to increase and decrease with volume semi-fixed cost -------------------------------a cost that is fixed at two or more values within the relevant range variable cost rate -------------------------------the variable cost of one unit of output cost behavior -------------------------------the relationship between cost and activity profit analysis -------------------------------a technique applied to an organization's cost and revenue structure that analyzes the effect of volume changes on costs and profits profit and loss statement -------------------------------a statement that summarizes the revenues, expenses, and profitability of either the entire organization or a subunit contribution margin -------------------------------the difference between per-unit revenue and per-unit cost and hence the amount that each unit of output contributes to cover fixed costs and ultimately flows to profit breakeven analysis -------------------------------a type of analysis that estimates the amount of some variable needed to break even
du pont analysis -------------------------------a financial statement analysis tool that decomposes return on equity into three components: profit margin, total asset turnover, and equity multiplier liquidity ratios -------------------------------indicate the business's ability to meet its short- term obligations asset management ratios -------------------------------financial statement analysis ratios that measure how effectively a firm is managing its assets debt management ratios -------------------------------reveal the extent to which the firm is financed with debt and the extent to which operating cash flows cover debt service and other fixed charge requirements profitability ratios -------------------------------group of ratios that measure different dimensions of a business's profitability comparative analysis -------------------------------the comparison of key financial and operational measures of one business with those of comparable businesses or industry averages trend analysis -------------------------------ratio analysis technique that examines the value of a ratio over time to see if it is improving or deteriorating common size analysis -------------------------------facilitates comparisons between firms of different sizes and for a single firm over time
percentage change analysis -------------------------------technique to analyze a business's financial statements that expresses the year-to-year changes in income statement items balances accounts as percentages operating indicator -------------------------------a ratio that focuses on operating data rather than financial data occupancy rate -------------------------------the percentage of hospital beds occupied average length of stay (ALOS) -------------------------------the average time a patient spends in an inpatient setting per admission case-mix index -------------------------------measure of inpatient service intensity calculated by averaging the patient diagnosis related group weights economic value added (EVA) -------------------------------measure of the economic profitability of a business that considers all costs, including the cost of equity benchmarking -------------------------------the comparison of performance metrics, such as financial ratios, of one business against those of similar businesses and industry averages key performance indicator (KPI) -------------------------------financial statement ratio or operating indicator that is considered by management to be critical to mission success dashboard -------------------------------format for presenting a business's KPI that resembles the dashboard of an automobile
