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






2. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






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






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






5. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






6. [Surplus/Operating Revenues]






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






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






9. [Inventory/ (Cost of Goods Sold/365)]






10. 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).






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






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






13. 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






14. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






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






17. 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.






18. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






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






20. 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.






21. 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.






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






23. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






24. 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.






25. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






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






27. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






28. The degree to which standards are met.






29. 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.






30. Non-operating income.






31. 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.






32. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






33. Supplementing traditional sources of revenue with new sources.






34. 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






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






36. A good or service provided in return for some type of compensation.






37. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






39. 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.






40. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






41. 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.






42. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






43. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






44. An entity that owns other companies.






45. [(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






46. Highly liquid current assets such as interest-bearing savings and checking accounts.






47. 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.






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






49. Private entity or individual who makes a donation






50. 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.