Free Online AHIP AHM-520 Practice Test

Under GAAP, three approaches to expense recognition are generally allowed: associating cause and effect, systematic and rational allocation, and immediate recognition.

A health plan most likely would use the approach of systematic and rational allocation in order to:

A health plan can use segment margins to evaluate the profitability of its profit centers.

One characteristic of a segment margin is that this margin:

A health plan's costs can be classified as committed costs or discretionary costs. An example of a discretionary cost for a health plan is the cost of its:

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000 -

Total assets.....$6,000,000 -

Current liabilities.....$2,500,000

Total liabilities.....$3,600,000

Stockholders' equity.....$2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

Assume that the healthcare industry average for the debt-to-equity ratio is 0.90.

The following statement(s) can correctly be made about Fairway's debt to equity ratio:

With regard to the financial statements prepared by health plans, it can correctly be stated that: