Question 1

Which of the following is known as an income tax deduction that allows the taxpayer to recover the costs of owned property or other assets placed in service over time that have a determinable useful life?

A) Deductible
B) Depreciation
C) Deficit reduction
D) De-amortization

Depreciation

Accepted Answer

Depreciation is an income tax deduction that allows the taxpayer to recover the costs of owned property or other assets placed in service over time that have a determinable useful life. The others are financial terms that are not tax deductions.

Question 2

The actual space that a physical therapy practice occupies is considered a real property asset when:&#10;A) It is owned&#10;B) It is leased&#10;C) It is mortgaged

Accepted Answer

Property is only a financial asset when it is owned outright. Leases and mortgages are expenses.

Question 3

For physical therapy practices, how are costs usually determined?&#10;A) Costs per fiscal year&#10;B) Costs per month&#10;C) Costs per patient visit&#10;D) Costs per patient

Accepted Answer

To negotiate effectively with insurers, managers need to know the cost per visit which is typically used to establish reimbursement rates and manage day-to-day accounting. The other options may be used but are not typically the figures for managing revenue and expenses.

Question 4

Labor costs in physical therapy practices are typically what kind of costs?&#10;A) Fixed&#10;B) Semi-fixed&#10;C) Variable&#10;D) Semi-variable

Accepted Answer

Unless there is never overtime or per diem staff, the labor costs of many practices are semi-fixed - a mix of salaried employees who may work extra hours or supplemented with per diem help. If the staff are all working through agencies contracted for providing staff that may be a fixed cost if additional hours are not utilized or paid for. Semi-variable is not a type of cost.

Question 5

Assets minus liabilities equals?&#10;A) Net worth&#10;B) Net debts&#10;C) Net profits&#10;D) Net deficits

Accepted Answer

Assets minus liabilities equals net worth. The other answer options are financial terms but they are not expressed as "net"

Question 6

What is the key consideration for locating an outpatient physical therapy practice?&#10;A) Access&#10;B) Safety&#10;C) Rental costs&#10;D) Public transportation

Accepted Answer

Although the business will not thrive if patients are unable to get to a practice, no matter how convenient it is, if it is unsafe for patients and/or staff, it is not likely to thrive. Costs are an important consideration, but not the major key.

Question 7

Which of the following best describes the financial responsibility of a typical mid-level manager in healthcare settings?&#10;A) Total responsibility&#10;B) No responsibility&#10;C) Limited to controlling costs&#10;D) Budget implementation

Accepted Answer

All managers are responsible for implementing established budgets which includes cost controls. The level of responsibility varies but is unlikely to be total or none. Responsibility goes beyond controlling costs, for example generating revenue.

Deck 10: Financial Responsibilities