,1. Which of the following accounting methods recognizes revenue
and expenses when they are incurred, regardless of when cash is
exchanged?
a) Cash basis accounting
b) Accrual basis accounting
c) Modified cash basis accounting
d) Cost accounting
Answer : b) Accrual basis accounting
Rationale : Accrual basis accounting recognizes revenues and
expenses when they are incurred, regardless of when cash
transactions occur.
2. Which financial statement reports the revenues and expenses
of a healthcare organization during a specific period?
a) Balance sheet
b) Statement of cash flows
c) Income statement
d) Retained earnings statement
Answer : c) Income statement
, Rationale : The income statement summarizes the revenues,
expenses, and profits/losses of a healthcare organization over a
period.
3. What is the primary purpose of Activity-Based Costing (ABC)
in healthcare?
a) To measure patient satisfaction
b) To allocate indirect costs more accurately
c) To streamline clinical workflows
d) To improve patient health outcomes
Answer : b) To allocate indirect costs more accurately
Rationale : ABC gives a more accurate distribution of indirect
costs to specific activities, leading to better financial insights.
### Fill-in-the-Blank
4. __________ is the process by which healthcare providers
negotiate contracts with insurance companies to determine
reimbursement rates for specific services.
Answer : Managed care contracting
Rationale : Managed care contracting involves negotiating with
insurers on the terms of reimbursement.
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