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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. [Surplus/Operating Revenues]






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






3. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






4. A budget in which line items are presented by program.






5. Properties and equipment less accumulated depreciation.






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






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






8. 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






9. process of measuring the resources (costs) used to produce results.






10. The difference between current assets and current liabilities.






11. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






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






13. Revenue is recorded when goods or services are delivered






14. 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.






15. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






16. [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).






17. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






18. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






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






20. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






21. 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.






22. 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.






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






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






25. Directly related to the purposes of the organization and the delivery of services






26. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






27. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






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






29. The income (operating revenues -operating expenses) earned in non-health-care related activities.






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






31. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






32. 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.






33. 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.






34. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






35. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






36. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.






37. Amounts due to the organization from patients - third parties - and others.






38. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






39. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






40. 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.






41. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






42. Each service center






43. [(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.






44. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






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






46. 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.






47. The cost of the supplies on hand at the beginning of the year.






48. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






49. The revenue and expense budgets of an organization.






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