Test your basic knowledge |

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. Current assets. Net working capital equals current assets –current liabilities.






2. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






3. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






4. 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.






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






6. Price times total quantity.






7. 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.






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






9. 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






10. 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






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






12. The difference between current assets and current liabilities.






13. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






14. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






15. Full-time equivalent employees. Two half-time employees equal one FTE.






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






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






18. [Total Liabilities/ Net assets]






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.






20. Amounts earned by the organization from the provision of service or sale of goods.






21. A security whose interest rate does not change during the lifetime of the bond.






22. [Total assets/Net Assets]






23. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






24. An entity that gives capital to another entity in expectation of a financial or non-financial return.






25. 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






26. A note payable that has as collateral real assets and that requires periodic payments.






27. 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






28. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






29. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






30. 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.






31. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






32. 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.






33. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






34. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






35. Ratios designed to answer the question: How profitable is the organization?






36. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






37. [(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






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






39. The amount of time between when an organization receives a service and pays for it.






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






41. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






42. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






43. 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.






44. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






45. 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).






46. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






47. Amounts the organization is obligated to pay others - including suppliers and creditors.






48. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






50. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.