HCM 432 Exam 2 Questions & Answers 2024/2025
Planning - ANSWERSThe process of preparing for the future
Budgeting - ANSWERSThe creation and use of financial forecasts to plan for and control a business's operations
Mission statement - ANSWERSA statement that defines the overall purpose of...
Planning - ANSWERSThe process of preparing for the future
Budgeting - ANSWERSThe creation and use of financial forecasts to plan for and control a business's
operations
Mission statement - ANSWERSA statement that defines the overall purpose of the organization
Strategic plan - ANSWERSA statement of where the business is now, where it wants to be in the future,
and how it intends to get there
Values statement - ANSWERSA statement of the core beliefs that underlie the culture of the organization
Vision statement - ANSWERSA statement that describes the desired position of the business at a future
point in time
Organizational goals - ANSWERSSpecified goals, including financial, that an organization strives to attain.
Generally, organizational goals are qualitative in nature
Organizational objectives - ANSWERSQuantitative targets that an organization sets to meet its
organizational goals
Operating plan - ANSWERSA schedule of events and a list of responsibilities for meeting the goals and
objectives laid out in the strategic plan
Financial plan - ANSWERSThe portion of the operating plan that focuses on the finance function
, Budgeting - ANSWERSPlanning for how much money you have and how it is spent
Bottom-up approach - ANSWERSA budgeting system whereby budgets originate at the department or
program level and then are aggregated and approved by senior managers
Top-down approach - ANSWERSA budgeting system whereby the finance staff prepares the budget for
senior management approval, after which it is sent to department and program heads for
implementation
Out year - ANSWERSA future year beyond the next budget year
Zero-based budgeting - ANSWERSeach budget unit starts with a clean slate, and all costs and revenues
must be justified and created from scratch
Revenue budget - ANSWERSA listing of the expected revenues of an organization, usually on a monthly,
quarterly, and annual basis and broken out by department, service, and payer
Expense budget - ANSWERSA listing of the expected expenses of an organization, usually by department
and service, and further broken down into components such as facilities, labor, and supplies
Operating budget - ANSWERSuses underlying data, such as volume, reimbursements, and labor
requirements, to forecast revenues, expenses, and profits
Cost center - ANSWERSA subunit within an organization that incurs costs but generates no revenues
Profit (revenue) center - ANSWERSA subunit within an organization that both generates revenues and
incurs costs, and hence creates profits
Variance - ANSWERSIn accounting, the difference between what actually happened and what was
expected to happen
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