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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. An organization's financial obligations that are to be paid within one year.
Current liabilities
Allowance for uncollectibles
Collections policies and procedures
Mutually exclusive projects
2. Financing that will be paid back in less than one year.
Short-term financing
Cash budget
Balance sheet
Mortgage bonds
3. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Tax-exempt bonds
Base Budget
Notes payable
Non-current assets
4. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Fully allocated costs
Net assets released from restriction
Other income
5. Irregular cash flows - typically occurring at the end of the life of a project.
Beginning inventory
Restricted donation
Non-regular cash flows
Collateral
6. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Capital structure ratios
Fixed asset turnover
Prepaid assets
Short-term financing
7. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
G & A expenses
MV
Cost of goods sold
Common costs
8. 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
Transaction
SWOT analysis
Book value
9. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.
Accounts receivable
Net proceeds from a bond issuance
Ratio analysis
Creditor
10. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Income from investments
Service centers
Discounting
Contribution margin
11. Being subject to sanctions with respect to carrying out responsibilities.
Fixed assets
Operating budget
Accounting period
Accountability
12. A security interest in one or more assets granted to lenders in a secured loan.
Long Term Solvency ratios
Lien
Operating expenses
Discount rate
13. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Donation
Debt to equity
Strategic planning
Common costs
14. [Surplus/Operating Revenues]
Profit margin
Increase in unrestricted net assets
Asset Management ratios
Liabilities
15. A transaction that reduces the risk of an investment.
Responsibility center
Hedge
Current assets
Capital structure ratios
16. The total amount of multiyear debt due in future years.
Donation
Centralization
Non-regular cash flows
Long-term debt - net of current portion
17. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Expense cost variance
Activity ratios
Non-current liabilities
Other support
18. The activities of an organization directly related to its main line of business.
Capital structure decision
Direct costs
Other revenues
Operating activities
19. The current traded rate for similar risk securities.
Discounting
Cash budget
Market rate of interest
IRR
20. 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.
Increase in unrestricted net assets
Net working capital
Tax-exempt bonds
Cash flows from operating activities
21. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
G & A expenses
Incremental cash flows
Final cost object
Step-down method
22. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Opening inventory
Investor
Total asset turnover
Periodic payments
23. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Operating activities
Income from investments
IRR
MV
24. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Expense budget
Cash flows from investing activities
Average payment period
Top-down/bottom-up approach
25. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Non-operating ratio
Net patient service revenue
Cash budget
Program budget
26. The cost of activities that take place to produce the final cost object
Increase in unrestricted net assets
G & A expenses
Intermediate Cost Object
Depreciation
27. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Current assets
Collection float
Operating activities
Controlling activities
28. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Fixed assets
Direct costs
For-profit
Cash flows from investing activities
29. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Opportunity cost
Market rate of interest
Mail float
Step Down
30. [Total assets/Net Assets]
Administrative cost centers
Leverage
Properties and equipment
Non-operating income
31. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Debt service coverage
Ending inventory
Discount rate
Centralization
32. Responsibility centers responsible for making a certain return on investments.
Opening inventory
Accountability
Investment centers
Cash budget
33. Revenues of the organization earned in non-healthcare related activities.
Beginning inventory
Non-operating revenues
Average Days Inventory
IRR
34. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Mission statement
Volume diversity
Expansion decisions
Mortgage bonds
35. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Return on net assets
Long-term investments
Certainty
Cash and cash equivalents
36. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
For-profit
Non-operating revenues
Cash flows from financing activities
Cost centers
37. An entity that is owed money for lending funds or supplying goods or services on credit.
For-profit
Long-term investments
Accounts payable
Creditor
38. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Administrative cost centers
Investor
Operating margin
Expense cost variance
39. Financing used expressly for the purchase of non-current assets.
Long Term Solvency ratios
Coupon rate
Mail float
Capital financing
40. 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.
Discounted cash flows
Capital financing
Lease
Collection float
41. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Donor
Strategic decisions
Net Assets to Total Assets
42. 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.
Deferred revenues
Long-term investments
Collateral
Comparative approach
43. [(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
Expenses
Debt service coverage
Cash flows from operating activities
Properties and equipment
44. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Transaction
Restricted donation
Creditor
Co-payments
45. Expenses of the organization incurred in non-health-care related activities.
Net assets to total assets
Balance sheet
Non-operating expenses
Acid test ratio
46. A note payable that has as collateral real assets and that requires periodic payments.
Expense budget
Present value of an annuity
Cost of capital
Mortgage
47. 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.
Capital
Compounding
Allocation base
Non-regular cash flows
48. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Non-current liabilities
Decentralization
Budget variance
Non-operating ratio
49. 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.
Cash flows from investing activities
Net accounts receivable
Line of credit
Activity Based Costing
50. Financial and non-financial standards against which organizational performance is measured.
Line-item budget
Strategic decisions
Performance measure
Non-current assets