Federal Nursing Home Administrator Practice Exam

Which of the following best defines revenues?

1. Cost of personnel

2. Assets owned by the facility

3. Earnings

4. Debits recorded

The correct answer is: Earnings

Revenues are defined as the earnings generated by an organization from its normal business operations, primarily from the sale of goods and services before any expenses are deducted. This means that revenue represents the inflow of resources that a facility receives as a direct result of its operations, such as patient fees, government reimbursements, and other income. Identifying revenues accurately is crucial for financial management within a nursing home, as it impacts budgeting, financial planning, and overall sustainability. Understanding that revenues are focused on the money that comes into the organization allows administrators to assess financial health and make informed decisions regarding resource allocation and services provided.