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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. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






2. Financial obligations that will be paid off over a time period longer than one year






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






4. 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






5. 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).






6. Supplementing traditional sources of revenue with new sources.






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






8. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






9. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






10. The amount of supplies used to provide a service or good.






11. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






12. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






13. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






14. {current liabilities/[(total expenses






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






16. A transaction that reduces the risk of an investment.






17. The budget used to forecast operating expenses.






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






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






20. Irregular cash flows - typically occurring at the end of the life of a project.






21. Donated assets that have restrictions on their use which will never be removed.






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






23. The percentage of each asset relative to total assets.






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






25. 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?






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






27. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






28. 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.






29. [Total assets/Net Assets]






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






31. A certificate attached to a bond representing the amount of interest to be paid to the holder.






32. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






33. The expenses incurred from an organization's operating activities.






34. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






35. 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.






36. 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.






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






38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






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






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






41. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






42. Private entity or individual who makes a donation






43. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






44. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






45. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






46. Portion of the profits the organization keeps in-house to use in support of its mission.






47. Budgets that typically cover two to five years.






48. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






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






50. [(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