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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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. Donated assets that have restrictions on their use which will never be removed.
Float
Ending inventory
Permanently restricted net assets
Coupon rate
2. 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.
Opening inventory
Expenses
Operating income
IRR
3. The cost of activities that take place to produce the final cost object
Expense budget
Allowance for uncollectibles
Temporarily restricted net assets
Intermediate Cost Object
4. 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.
Line-item budget
Discounting
Fixed labor budget
Efficiency
5. 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.
Cost
Periodic payments
Non-operating income
Cash flows from financing activities
6. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Activity ratios
Co-payments
Average payment period
Fully allocated costs
7. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Fixed labor budget
Long Term Solvency ratios
Volume diversity
Other support
8. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Book value
Indirect costs
Cost centers
For-profit
9. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Income from investments
Traditional profit centers
Other revenues
Statement of operations
10. {current liabilities/[(total expenses
Times interest earned
ROI
Cash equivalents
Average payment period
11. The percentage of each asset relative to total assets.
Co-payments
Net accounts receivable
Non-current assets
Asset mix
12. 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.
Tax-exempt bonds
Horizontal analysis
Non-operating ratio
Service centers
13. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
IRR
Depreciation
Debt to equity
Working capital
14. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Deferred revenues
Net Assets
Budget variance
Revenue rate variance
15. The revenue and expense budgets of an organization.
Operating budget
Assets
Responsibility center
Decentralization
16. 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.
Service centers
Average payment period
Bond rating agency
Direct costs
17. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Precautionary purposes
Other income
Fixed Asset Turnover
Net patient service revenue
18. The expenses incurred from an organization's operating activities.
Operating expenses
Quick ratio
Loan amortization schedule
Lease
19. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Cost of capital
Market rate of interest
Revenue rate variance
G & A expenses
20. Private entity or individual who makes a donation
FV
Breakeven point
Discounting
Donor
21. 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.
Asset Management ratios
Loan amortization schedule
Quick ratio
Bad debt
22. 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.
Comparative approach
Bond rating agency
ABC
Asset mix
23. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Lease
Capital investment decisions
Realization principle
Transaction
24. Financial and non-financial standards against which organizational performance is measured.
Time value of money
Performance measure
Budget variance
Line-item budget
25. The total amount of multiyear debt due in future years.
Ratio analysis
Fixed supplies budget
Long-term debt - net of current portion
Accrual basis of accounting
26. 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.
Revenue enhancement
Investment grade
Indirect costs
For-profit
27. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Fixed labor budget
Line-item budget
Non-current assets
Operating activities
28. 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.
ROI
Net present value
Step-down method
Opening inventory
29. Service center costs are allocated to both mission centers and other service centers
Step Down
Capital
Accountability
Fixed labor budget
30. The difference between current assets and current liabilities.
Short-term financing
Budget
Net working capital
Cost centers
31. The degree of dispersion of responsibility within an organization. See also Centralization.
Non-current assets
Decentralization
Inflation
Program budget
32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Incremental cash flows
Capital structure ratios
Investment grade
Allowance for uncollectibles
33. A security whose interest rate does not change during the lifetime of the bond.
Base Budget
Net working capital
Fixed (interest) rate debt
Bad debt
34. {[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).
Compounding
Days cash on hand
Effectiveness
Net present value
35. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Allowance for uncollectibles
Billing - collections - and disbursement policies and procedures
FTE
Operating cash flows
36. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Accumulated depreciation
Discount rate
Liquidity
Donor
37. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Final cost object
Issuer
Non-operating income
FTE
38. 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.
Accumulated depreciation
Interest
HMO
Non-operating revenues
39. 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?
Statement of cash flows
Statement of operations
Billing float
Disbursement float
40. The elapsed time between financial statements. Common accounting periods
Multiyear budget
Accounting period
Strategic decisions
G & A expenses
41. Financial obligations that will be paid off over a time period longer than one year
Tangible assets
Float
Non-current liabilities
Capital assets
42. Gross proceeds less the underwriter's fee and other issuance fees.
Expense volume variance
Long Term Solvency ratios
Net proceeds from a bond issuance
Certainty
43. Literally non-movable assets. Generally used to refer to buildings and equipment.
Fixed assets
Bad debt
Mutually exclusive projects
G & A expenses
44. 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.
Administrative profit centers
Capital financing
Step-down method
Periodic payments
45. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Retained earnings
Capital structure decision
Budget
Loan amortization schedule
46. Financing used expressly for the purchase of non-current assets.
Periodic payments
Market rate of interest
Capital financing
Accounting period
47. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.
Expense cost variance
Fixed (interest) rate debt
Fixed asset turnover
Top-down/bottom-up approach
48. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Investment centers
Interest
Cost object
Cost avoidance
49. Supplementing traditional sources of revenue with new sources.
Revenue enhancement
Balance sheet
IRR
Tangible assets
50. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Top-down/bottom-up approach
Decentralization
Strategic financial planning