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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. A note payable that has as collateral real assets and that requires periodic payments.






2. [(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.






3. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






4. A situation in which if one project is implemented the other(s) will not be.






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






6. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






7. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






8. What a series of equal payments in the future is worth today taking into account the time value of money.






9. The revenue and expense budgets of an organization.






10. A legal obligation to pay the holder of the note or lien.






11. How an organization chooses to finance its working capital needs.






12. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






13. The resources owned by the organization. It is one of the three major categories on the balance sheet.






14. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






15. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






16. An organization's financial obligations that are to be paid within one year.






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






18. 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.






19. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






20. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






21. 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.






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






23. [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).






24. The absence of risk in an investment.






25. The budget used to forecast operating expenses.






26. 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.






27. Supplementing traditional sources of revenue with new sources.






28. The degree of dispersion of responsibility within an organization. See also Centralization.






29. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






31. Private entity or individual who makes a donation






32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






33. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






34. 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.






35. An assignment or grading of the likelihood that an organization will not default on a bond.






36. 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.






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






38. Current assets. Net working capital equals current assets –current liabilities.






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






40. 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.






41. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






43. 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






44. 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.






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






46. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






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






48. Capital investment decisions designed to increase the operational capability of a health care organization.






49. Ratios that measure how efficiently an organization is using its assets to produce revenues.






50. Responsibility centers responsible for making a certain return on investments.