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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. Assets = Liabilities + Net Assets (aka Equity).






2. The difference between what was planned (budgeted) and what was achieved (actual).






3. An entity that gives capital to another entity in expectation of a financial or non-financial return.






4. 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.






5. {current liabilities/[(total expenses






6. 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.






7. Assets that have a physical presence.






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






9. Series of payments over time - such as interest paid to bondholders.






10. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






11. 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)






12. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






13. 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.






14. The cash flows derived from an organization's operating activities.






15. Capital investment decisions designed to increase an organization's strategic position.






16. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






17. [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?






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






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






20. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






21. 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.






22. A security interest in one or more assets granted to lenders in a secured loan.






23. [Surplus/Operating Revenues]






24. Financial and non-financial standards against which organizational performance is measured.






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






26. An entity that is owed money for lending funds or supplying goods or services on credit.






27. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






28. 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.






29. 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






30. Being subject to sanctions with respect to carrying out responsibilities.






31. 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.






32. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






33. [(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






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.






35. Price times total quantity.






36. Debt to be paid off in a period longer than one year.






37. 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.






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






39. [(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.






40. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






41. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






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






43. [Total Revenues/ Total Assets]






44. [Net Accounts Receivable/(Revenue/356)]






45. 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.






46. Costs that are traced to a cost object. See also Indirect costs and Cost object.






47. Stated interest rate on a bond - as promised by the issuer.






48. 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.






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






50. 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.