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Free AHM-520 Exam Braindumps (page: 26)

Page 25 of 55
PDF with 215 Questions

The Caribou health plan is a for-profit organization. The financial statements that Caribou prepares include balance sheets, income statements, and cash flow statements. To prepare its cash flow statement, Caribou begins with the net income figure as reported on its income statement and then reconciles this amount to operating cash flows through a series of adjustments. Changes in Caribou's cash flow occur as a result of the health plan's operating activities, investing activities, and financing activities.

To prepare its cash flow statement, Caribou uses the direct method rather than the indirect method.

  1. True
  2. False

Answer(s): B



The Caribou health plan is a for-profit organization. The financial statements that Caribou prepares include balance sheets, income statements, and cash flow statements. To prepare its cash flow statement, Caribou begins with the net income figure as reported on its income statement and then reconciles this amount to operating cash flows through a series of adjustments. Changes in Caribou's cash flow occur as a result of the health plan's operating activities, investing activities, and financing activities.

Caribou is engaged in an operating activity when it

  1. Purchases or sells assets of the health plan
  2. Disposes of a subsidiary
  3. Repays funds loaned by its creditors
  4. Pays expenses associated with the healthcare services provided to its members

Answer(s): D



The McGwire Health Plan is a for-profit health plan that issues stock. Events that will cause the owners' equity account of McGwire to change include

  1. McGwire's retention of net income
  2. McGwire's payment of cash dividends on the stock it issued
  3. McGwire's purchase of treasury stock
  4. All of the above

Answer(s): D



As part of the first step in its strategic planning process, the Trout health plan developed the following statements:
Statement A--Trout will deliver quality healthcare to our customers at a reasonable cost. Statement B--Within five years, Trout will be recognized as the industry leader in all of our markets.

Statement A can best be described as a

  1. Vision statement, and Statement B also can best be described as a vision statement
  2. Vision statement, whereas Statement B can best be described as a mission statement
  3. Mission statement, whereas Statement B can best be described as a vision statement
  4. Mission statement, and Statement B also can best be described as a mission statement

Answer(s): C






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