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






2. Revenues of the organization earned in non-healthcare related activities.






3. The cost of the supplies on hand at the beginning of the year.






4. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






5. Each service center






6. 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.






7. Literally non-movable assets. Generally used to refer to buildings and equipment.






8. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






9. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






10. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






12. Being subject to sanctions with respect to carrying out responsibilities.






13. Properties and equipment less accumulated depreciation.






14. (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.






15. A certificate attached to a bond representing the amount of interest to be paid to the holder.






16. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






17. 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).






18. The current traded rate for similar risk securities.






19. Private entity or individual who makes a donation






20. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






21. 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






22. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






23. The difference between current assets and current liabilities.






24. A security interest in one or more assets granted to lenders in a secured loan.






25. Non-operating income.






26. The section of the expense budget that forecasts salary and benefits.






27. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






28. 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.






29. [(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






30. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






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






32. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






33. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






34. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






35. Expenses that have been incurred - but not yet paid.






36. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






37. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






38. An entity that sells bonds in order to raise money.






39. 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.






40. process of measuring the resources (costs) used to produce results.






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






42. Amounts due to the organization from patients - third parties - and others.






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






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






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






46. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






47. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






48. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






49. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






50. 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