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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. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






3. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






4. 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.






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






6. How an organization chooses to finance its working capital needs.






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






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






9. Proceeds lost by foregoing other opportunities.






10. 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.






11. [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?






12. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






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






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






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






16. A situation in which if one project is implemented the other(s) will not be.






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






18. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






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






20. [(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






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






23. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






24. 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.






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






26. 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.






27. 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)






28. 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.






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






30. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






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






33. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






34. 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.






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






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






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






38. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






39. 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.






40. Capital investment decisions designed to increase the operational capability of a health care organization.






41. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






42. The rise in an economy's general level of prices.






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






44. The idea that a dollar today is worth more than a dollar in the future.






45. An entity that owns other companies.






46. The budget used to forecast operating expenses.






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






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






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






50. 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.