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ACCA Financial Management

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 amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






2. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






3. Directly related to the purposes of the organization and the delivery of services






4. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






5. Operating income not reported elsewhere under revenues - gains - and other support.






6. 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.






7. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






8. 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.






9. 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






10. Capital investment decisions designed to increase an organization's strategic position.






11. The budget used to forecast operating expenses.






12. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






13. Financing that will be paid back in less than one year.






14. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






15. Financial obligations that will be paid off over a time period longer than one year






16. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






17. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






18. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






19. [Net Accounts Receivable/(Revenue/356)]






20. 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.






21. Price times total quantity.






22. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






23. Responsibility centers responsible for making a certain return on investments.






24. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






25. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






26. 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.






27. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






28. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






29. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






30. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






31. The resources owned by the organization. It is one of the three major categories on the balance sheet.






32. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






33. Supplementing traditional sources of revenue with new sources.






34. (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;






35. 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.






36. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






37. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






38. Return on investment. The percentage gain or loss experienced from an investment.






39. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






40. 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






41. A method by which the organization develops its strategies and budgets to meet future financial targets.






42. Each service center






43. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






44. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






45. 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






46. Donated assets that have restrictions on their use which will never be removed.






47. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






48. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






49. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






50. The process of distributing service center costs to mission centers - to determine the full cost of each mission center