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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. [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).
Fixed Asset Turnover
Net assets to total assets
Capital structure decision
Traditional profit centers
2. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Operating budget
Discounted cash flows
Controlling activities
Responsibility center
3. The increase in the value of an investment from the time it is purchased until the time it is sold.
Allocation
Line-item budget
Permanently restricted net assets
Capital appreciation
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
Cost of goods sold
ABC
Performance measure
Asset Turnover Ratio
5. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Temporarily restricted net assets
Revenue budget
Revenue rate variance
Investment grade
6. Expenses of the organization incurred in non-health-care related activities.
Non-operating expenses
Loan amortization schedule
Profitability ratios
Mission Center
7. The rise in an economy's general level of prices.
Cash flows from operating activities
Income from investments
Inflation
ROI
8. [Total Liabilities/ Net assets]
Allocation base
Time value of money
Debt to equity
Certainty
9. Assets = Liabilities + Net Assets (aka Equity).
Non-current assets
Billing float
Operating expenses
Basic accounting equation
10. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Lease
Average payment period
Balance sheet
Centralization
11. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Expenses
Cost of capital
Net Assets to Total Assets
Non-current liabilities
12. [Net Accounts Receivable/(Revenue/356)]
Cash flows from operating activities
Long Term Solvency ratios
Lender
Average Days Receivable
13. The cost of the supplies on hand at the beginning of the year.
Base Budget
Mortgage bonds
Opening inventory
HMO
14. {[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).
Days cash on hand
Net patient service revenue
Time value of money
Discounted cash flows
15. Series of payments over time - such as interest paid to bondholders.
Coupon
Top-down budgeting
Periodic payments
Short-term financing
16. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Administrative cost centers
Cash basis of accounting
Mortgage bonds
Expansion decisions
17. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Liquidity ratios
Financing activities
Common costs
Fixed asset turnover
18. Financial and non-financial standards against which organizational performance is measured.
Tangible assets
Balance sheet
Performance measure
IRR
19. Portion of the profits the organization keeps in-house to use in support of its mission.
Restricted donation
Retained earnings
ROI
Responsibility center
20. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Mail float
Return on net assets
Footnotes
21. 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.
Capital financing
Expansion decisions
Days cash on hand
Accrual basis of accounting
22. The idea that a dollar today is worth more than a dollar in the future.
Time value of money
Non-operating expenses
Expense volume variance
Fixed asset turnover
23. A method by which the organization develops its strategies and budgets to meet future financial targets.
Line of credit
Market rate of interest
Contribution margin
Strategic financial planning
24. 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.
Mortgage bonds
Non-regular cash flows
Mission statement
Step Down
25. How an organization chooses to finance its working capital needs.
Mortgage bonds
Financing mix
Net accounts receivable
IRR
26. (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.
ROI
Return on total assets
Assets
Tangible assets
27. 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.
Annuity
Cost avoidance
Inflation
Financing mix
28. Donated assets that have restrictions on their use which will never be removed.
Mortgage
Step Down
Final cost object
Permanently restricted net assets
29. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Financing activities
Asset Management ratios
Expense budget
30. 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.
Accrual basis of accounting
Average payment period
Net present value
Effectiveness
31. Revenues generated from an organization's operating activities.
Cash flows from investing activities
Retained earnings
Financing activities
Operating revenues
32. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Payback
Bond rating agency
Coupon rate
Restricted donation
33. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Parent organization
Tangible assets
Restricted donation
Top-down/bottom-up approach
34. The current traded rate for similar risk securities.
Inflation
Strategic planning
Expenses
Market rate of interest
35. A legal obligation to pay the holder of the note or lien.
Spillover cash flows
Payback
Annuity
Notes payable
36. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Total asset turnover
Collection float
Long-term financing
Top-down budgeting
37. The section of the expense budget that forecasts salary and benefits.
Long-term debt to net assets ratio
Fixed labor budget
Efficiency
Non-operating income
38. A situation in which if one project is implemented the other(s) will not be.
Step-down method
Lease
Collateral
Mutually exclusive projects
39. Recording expenses associated with making revenue at the same time as revenues are recognized
Non-operating income
Billing float
Matching principle
Certainty
40. 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.
Centralization
Billing - collections - and disbursement policies and procedures
Payback
Investment grade
41. An entity that sells bonds in order to raise money.
Issuer
Operating income
Income from investments
Traditional profit centers
42. Return on investment. The percentage gain or loss experienced from an investment.
Increase in unrestricted net assets
Realization principle
ROI
IRR
43. 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.
Cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Administrative profit centers
Mortgage bonds
44. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Beginning inventory
Bad debt
Accountability
Current liabilities
45. 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.
Final cost object
Increase in unrestricted net assets
Capital financing
Strategic decisions
46. 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.
Billing float
Strategic financial planning
Present value of an annuity
Quick ratio
47. The purchase of assets with contributed and internally generated funds. See also Debt financing.
FV
Cash budget
Line-item budget
Equity financing
48. 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.
Permanently restricted net assets
Statement of changes in net assets
Accountability
Revenues
49. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Compounding
Expense cost variance
Other support
Retained earnings
50. [(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
Debt service coverage
FTE
Statement of changes in net assets
Average Days Inventory