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ACCA Financial Management
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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 section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Financing activities
Strategic planning
Compounding
Coupon payment
2. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Clinical cost centers
Net present value
Excess of revenues over expenses
Opportunity cost
3. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
ABC
Capital assets
Current assets
Controlling activities
4. 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.
Profitability ratios
Increase in unrestricted net assets
Beginning inventory
Responsibility center
5. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
G & A expenses
Cash and cash equivalents
Performance budget
Lender
6. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Expansion decisions
Times interest earned
Capital budget
Average Days Inventory
7. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Financing mix
Accrual basis of accounting
Loan amortization schedule
Administrative cost centers
8. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Creditor
Dividends
Cost of goods sold
Spillover cash flows
9. 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.
Step Down
Net Assets to Total Assets
Common costs
Expenses
10. A legal obligation to pay the holder of the note or lien.
Non-operating income
Notes payable
Asset Management ratios
Discount rate
11. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Annuity
Net accounts receivable
Capital structure decision
Excess of revenues over expenses
12. A situation in which if one project is implemented the other(s) will not be.
Temporarily restricted net assets
Mutually exclusive projects
Long Term Solvency ratios
Current ratio
13. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Billing - collections - and disbursement policies and procedures
Breakeven point
Fixed asset turnover
Not-for-profit
14. Revenue is recorded when goods or services are delivered
Accounts payable
Ending inventory
Realization principle
Comparative approach
15. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Line-item budget
Net accounts receivable
Capital assets
Interest
16. Directly related to the purposes of the organization and the delivery of services
Mission Center
FTE
Cost avoidance
Long Term Solvency ratios
17. Each service center
Strategic planning
Transaction
Current liabilities
Single/Simple Step
18. 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.
Other support
Performance budget
Non-operating ratio
Line of credit
19. 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
ABC
Profit margin
Quick ratio
Bonds
20. 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.
Statement of changes in net assets
Creditor
HMO
Assets
21. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Mission Center
Non-operating expenses
Fixed costs
Total revenue
22. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Mission Center
Increase in unrestricted net assets
Indirect costs
Net assets to total assets
23. A good or service provided in return for some type of compensation.
Transaction
Mail float
Expense cost variance
Activity Based Costing
24. The activities of an organization directly related to its main line of business.
Program budget
Tax-exempt bonds
Contribution margin
Operating activities
25. Capital investment decisions designed to increase an organization's strategic position.
Operating budget
Book value
Investment centers
Strategic decisions
26. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Traditional profit centers
Non-operating income
Accumulated depreciation
Tax-exempt bonds
27. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Net patient service revenue
Other support
Cost object
Statement of cash flows
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.
Capital structure decision
IRR
Issuer
Step-down method
29. 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.
Coupon payment
Accounting period
Final cost object
Line-item budget
30. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Mail float
Bonds
Lien
Product diversity
31. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Collections policies and procedures
Mission Center
Cash and cash equivalents
Properties and equipment
32. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he
HMO
Ratio analysis
Operating cash flows
Revenue enhancement
33. 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.
Capital assets
Efficiency
Net accounts receivable
Mortgage
34. 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.
Cash equivalents
Performance budget
Net proceeds from a bond issuance
Administrative profit centers
35. Assets that have a physical presence.
Horizontal analysis
Other income
Tangible assets
Certainty
36. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Amortization of a loan
Activity ratios
Asset mix
Quick ratio
37. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Bond rating agency
Fully allocated costs
Administrative cost centers
Fixed supplies budget
38. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Financing activities
Efficiency
Assets
ABC
39. The cost of activities that take place to produce the final cost object
Allocation
Coupon
Intermediate Cost Object
Equity financing
40. Recording expenses associated with making revenue at the same time as revenues are recognized
Debt service coverage
Float
Matching principle
Multiyear budget
41. Full-time equivalent employees. Two half-time employees equal one FTE.
Activity ratios
Investment centers
Retained earnings
FTE
42. Being subject to sanctions with respect to carrying out responsibilities.
Non-current assets
G & A expenses
Profitability ratios
Accountability
43. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Net patient service revenue
Operating revenues
Expense budget
Efficiency
44. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Income from investments
Net patient service revenue
Capital assets
Activity Based Costing
45. Financial obligations that will be paid off over a time period longer than one year
Administrative cost centers
Non-current liabilities
FTE
Capital appreciation
46. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Net assets released from restriction
Net working capital
Mission Center
Working capital
47. An investment that generates an annuity for an indefinite period of time - basically forever.
Revenue budget
Efficiency
Service centers
Perpetuity
48. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Collection float
Expense volume variance
Investor
Cash equivalents
49. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Coupon
Return on net assets
Liquidity
Cash equivalents
50. A method by which the organization develops its strategies and budgets to meet future financial targets.
Inflation
Net assets released from restriction
Strategic financial planning
Ending inventory
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