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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 elapsed time between financial statements. Common accounting periods






2. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






3. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






4. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






5. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






6. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






7. Gross proceeds less the underwriter's fee and other issuance fees.






8. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






9. Properties and equipment less accumulated depreciation.






10. 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.






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






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






13. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






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






15. 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.






16. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






17. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






18. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






19. An entity that owns other companies.






20. 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.






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






22. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






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






24. Price times total quantity.






25. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






26. The activities of an organization directly related to its main line of business.






27. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






28. Proceeds lost by foregoing other opportunities.






29. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






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






31. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






32. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






33. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






34. 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






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






36. The amount of supplies used to provide a service or good.






37. 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).






38. Private entity or individual who makes a donation






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






40. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






42. A legal obligation to pay the holder of the note or lien.






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






44. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






45. An entity that is owed money for lending funds or supplying goods or services on credit.






46. Revenues generated from an organization's operating activities.






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






48. Demonstrates the ability to pay off long term debt






49. Irregular cash flows - typically occurring at the end of the life of a project.






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