HFMA CHFP Practice Questions| TestInsights

Question 1

An accounting method that records revenues when earned and resources when used, regardless of cash in or out of the organization is called:

AAccrual basis of accounting

BAccounting Flow

CModified statement of operations

DCash basis of accounting

Correct : A

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AAccrual basis of accounting

BAccounting Flow

CModified statement of operations

DCash basis of accounting

Question 2

Which of the following is NOT the disadvantage of accrual basis of accounting?

Akeeps track of revenues generated and resources used as well as cash flows

Bopen to manipulation, by bending accounting rules

Cmatches revenues with the resources used to generate those revenuers

Dthe financial statements provide a broader picture of the provider's operation

Correct : B

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Akeeps track of revenues generated and resources used as well as cash flows

Bopen to manipulation, by bending accounting rules

Cmatches revenues with the resources used to generate those revenuers

Dthe financial statements provide a broader picture of the provider's operation

Question 3

The rules to record a transaction under the accrual basis of accounting includes:

AAt least one account must be used to record a transaction.

BAfter each transaction, the fundamental accounting equation must be balanced.

CBoth A & B

DNeither A nor B

Correct : B

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AAt least one account must be used to record a transaction.

BAfter each transaction, the fundamental accounting equation must be balanced.

CBoth A & B

DNeither A nor B

Question 4

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

ATrue

BFalse

Correct : A

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ATrue

BFalse

Question 5

What provides information about how much revenue was generated and the amount of resources used to generate those resources?

AStatement of operations

BStatement of cash flows

CStatement of changes in net assets

DNone of the above

Correct : A

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AStatement of operations

BStatement of cash flows

CStatement of changes in net assets

DNone of the above

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