Question 1

Under accrual basis of accounting, revenues are recognized when earned.

Options :

A : True

B : False

Answer: A

Question 2

The formula for times interest earned ratio is:

Options :

A : [{(excess of revenues _ expenses) + interest expense}/ expected expense]

B : [(excess of revenues over expenses _ interest expense) / interest revenue]

C : [(excess of revenues over expenses + interest expense) / interest expense]

D : [(excess of revenues over expenses + interest expense) / interest expense]

Answer: C

Question 3

By subtracting contractual allowances and charity care discounts from gross patient accountsreceivables, what remains is:

Options :

A : Patients accounts payable

B : Patients accounts receivable

C : Patients accounts bill

D : Patients cash income

Answer: B

Question 4

Organizational units responsible for earning a profit by providing health care services and theirrevenues are earned either on a free-for-service or a flat fee basis refers to:

Options :

A : Organizational earnings centers

B : Traditional profits centers

C : Profit earning centers

D : Flat fee profit centers

Answer: B

Question 5

Operating income divided by total operating revenues measures:

Options :

A : Net operating value

B : Operating margin ratio

C : Gross operating ratio

D : Subsequent operating ratio

Answer: B

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