Name and descibe 5 types of budgets.

Answer:

Incremental versus Zero Based Budgeting- only increases vs. rejustifying everything

Comprehensive versus Limited in-Scope budgeting - Comprehensive budgeting integrates all the budgets into one document (rev, exp, and capital) verses only parts of the budget

Fixed versus Flexible Budgeting – volumes do not change verses variable costs with volume

Discrete Versus continuous Budgeting – lose all income not used verses carrying to the new year

Top down verses bottom up- dictated verses participatory

1. Accounting Entity - data must be pertinent to business, defines the business entities
2. Going Concern - indefinite life, ongoing business
3. Accounting period - can be any length of time
4. Objectivity and reliability - information recorded must be based on objective verifiable information
5. Monetary Unit - example: Dollar
6. Relevance - relevant to user, must contain sufficient info to make decisions
7. Full Disclosure - must provide the complete picture, you must not mislead by omission of pertinent information
8. Materiality - only entities which are material to financial condition of an organization need to be separately categorized
9. Conservatism - choose approach that is least likely to overstate the financial condition
10. Consistency and comparability - use like guidelines over periods of time.

The following are strategies used to manage hospital cash flows except:

1.     Payment of employees every two weeks or every month.

2.     Pay vendors when the supplies or bill are received.

3.     Minimize employee wage & supply expense through exploring ways to accomplish more work with fewer resources.

4.     Pay vendors only when the bill is due.

Answer: #2.  Source: The Financial Management of Hospitals and Healthcare Organizations, p.204.

Organizations will have different cost allocations bases on the following decisions EXCEPT;

A. Allocaton method

B. Allocation base

C. Responsibility centers

D. Approved budget

<D : Manual for the Board Governors Examination in Healthcare Management p.54  >

1. Develop and enforce policies and procedures for the prompt and accurate registration and admission of all patients.
2. Implement a patient accounting system that will promptly and accurately record all charges.
3. Maintain a medical record system that will promptly and accurately record all clinical data.
4. Obtain a board-approved credit and collection policy that directs management in extending credit and collecting accounts from patients.