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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Final cost object
Investment centers
Performance budget
Loan amortization schedule
2. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.
Bond rating
Float
Cash budget
Capital structure decision
3. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.
Revenue rate variance
Bonds
Fixed (interest) rate debt
Properties and equipment
4. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Cost Accounting
Non-current assets
Capital financing
Book value
5. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Hedge
Activity Based Costing
Interest
Cost
6. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.
Line-item budget
Market rate of interest
Retained earnings
Line of credit
7. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Annuity
Responsibility center
Coupon rate
Days cash on hand
8. Ratios designed to answer the question: How profitable is the organization?
Tangible assets
Operating revenues
Profitability ratios
Basic accounting equation
9. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
ABC
Base Budget
Asset Management ratios
Transaction
10. Properties and equipment less accumulated depreciation.
Capital investment decisions
Direct costs
Liquidity
Properties and equipment - net
11. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Collateral
ROI
Mortgage bonds
Non-current liabilities
12. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Mission Center
Breakeven point
Asset mix
FTE
13. Amounts due to the organization from patients - third parties - and others.
Activity ratios
Expansion decisions
Accounts receivable
Hedge
14. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Service centers
For-profit
Creditor
Net assets released from restriction
15. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Other support
Transaction
Final cost object
MV
16. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Volume diversity
Short-term financing
Footnotes
17. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Current liabilities
Total revenue
Asset Turnover Ratio
Allocation
18. [Surplus/Operating Revenues]
Basic accounting equation
Effectiveness
Profitability ratios
Profit margin
19. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Net assets released from restriction
Leverage
Base Budget
Bad debt
20. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Footnotes
Coupon
Accumulated depreciation
Total revenue
21. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Leverage
Mission statement
IRR
Net working capital
22. An organization's financial obligations that are to be paid within one year.
Current liabilities
Mortgage
Times interest earned
Fixed labor budget
23. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he
Current liabilities
Volume diversity
HMO
Depreciation
24. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Interest
Accountability
Final cost object
Lender
25. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Average payment period
Other income
Dividends
Accounting period
26. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Capital
Incremental cash flows
Service centers
Equity financing
27. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Fixed costs
Intermediate Cost Object
Non-operating revenues
28. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Collections policies and procedures
Multiyear budget
Accountability
Coupon payment
29. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.
Equity financing
Step-down method
Profit margin
Allowance for uncollectibles
30. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Excess of revenues over expenses
Accounts payable
Capital structure decision
Expenses
31. The difference between what was planned (budgeted) and what was achieved (actual).
Average Days Inventory
Amortization of a loan
Non-operating revenues
Budget variance
32. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Cost of capital
Float
Net patient service revenue
Coupon
33. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Prepaid assets
Capital budget
Interest
Income from investments
34. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Notes payable
Equity financing
Product diversity
Net proceeds from a bond issuance
35. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Responsibility center
Other income
Cost avoidance
36. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Creditor
Accrual basis of accounting
Amortization of a loan
Accounting period
37. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Fixed asset turnover
G & A expenses
Revenue budget
Retained earnings
38. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not
Market rate of interest
Top-down/bottom-up approach
Not-for-profit
Non-current assets
39. Revenue is recorded when goods or services are delivered
Realization principle
Top-down budgeting
Donor
Average Days Receivable
40. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor
Issuer
Revenue enhancement
Cash flows from investing activities
Cost centers
41. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Lease
Statement of cash flows
Depreciation
Financing activities
42. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to
Properties and equipment
Loan amortization schedule
Debt to equity
Contribution margin
43. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Return on net assets
HMO
Profitability ratios
Comparative approach
44. A method by which the organization develops its strategies and budgets to meet future financial targets.
Accountability
Strategic financial planning
Operating activities
Excess of revenues over expenses
45. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Fixed labor budget
SWOT analysis
Precautionary purposes
Excess of revenues over expenses
46. Capital investment decisions designed to increase the operational capability of a health care organization.
Restricted donation
Expansion decisions
Fully allocated costs
SWOT analysis
47. The cost of the supplies on hand at the beginning of the year.
Co-payments
Capital budget
Present value of an annuity
Opening inventory
48. Supplementing traditional sources of revenue with new sources.
Investment centers
Long-term debt to net assets ratio
Income from investments
Revenue enhancement
49. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Return on net assets
Product diversity
Capital financing
Expenses
50. Full-time equivalent employees. Two half-time employees equal one FTE.
Centralization
Deferred revenues
FTE
Efficiency