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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. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Clinical cost centers
Book value
Average payment period
Intermediate Cost Object
2. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Operating revenues
Expenses
Average payment period
Cash basis of accounting
3. Properties and equipment less accumulated depreciation.
Service centers
Investment grade
Line-item budget
Properties and equipment - net
4. A budget in which line items are presented by program.
Clinical cost centers
Program budget
Fixed (interest) rate debt
Operating revenues
5. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Hedge
Discounted cash flows
Mail float
Administrative cost centers
6. The budget used to forecast operating expenses.
Expense budget
Operating activities
Ratio analysis
Realization principle
7. 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.
Incremental cash flows
Cost avoidance
Expenses
Operating activities
8. 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.
Debt to equity
Average Days Receivable
Collateral
Common costs
9. 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.
Accounts payable
Comparative approach
Capital assets
Product diversity
10. {[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).
Operating cash flows
Net patient service revenue
Days cash on hand
Non-current assets
11. A good or service provided in return for some type of compensation.
Loan amortization schedule
Capital assets
Allowance for uncollectibles
Transaction
12. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Basic accounting equation
Prepaid assets
Non-operating ratio
Time value of money
13. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Net increase (decrease) in cash and cash equivalents
Capital structure decision
Indirect costs
Capital budget
14. 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
Cash flows from investing activities
Not-for-profit
Collection float
Retained earnings
15. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Non-regular cash flows
Step Down
Precautionary purposes
Acid test ratio
16. 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.
Cash basis of accounting
Statement of operations
Dividends
Ratio analysis
17. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Net patient service revenue
Lender
Other expenses
Clinical cost centers
18. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Income from investments
Fixed labor budget
Mortgage
Co-payments
19. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Cash equivalents
Direct costs
Certainty
Service centers
20. [(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
Prepaid assets
Transaction
Collateral
Expense volume variance
21. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Cost of capital
Net working capital
Liabilities
Opening inventory
22. Expenses that have been incurred - but not yet paid.
Statement of operations
Multiyear budget
Accrued expenses
Lien
23. The expenses incurred from an organization's operating activities.
Accountability
Liquidity
Accounts receivable
Operating expenses
24. Service center costs are allocated to both mission centers and other service centers
Step Down
Properties and equipment - net
Prepaid assets
Deferred revenues
25. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Long-term debt to net assets ratio
Days cash on hand
Temporarily restricted net assets
Book value
26. The elapsed time between financial statements. Common accounting periods
IRR
Donation
Certainty
Accounting period
27. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
MV
Non-current assets
Final cost object
Cost Accounting
28. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo
Annuity
Long-term debt to net assets ratio
Discounting
Disbursement float
29. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Fixed asset turnover
Amortization of a loan
Cash flows from operating activities
Balance sheet
30. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Properties and equipment
Strategic planning
Capital assets
Mission statement
31. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Operating cash flows
Net Assets to Total Assets
Operating activities
32. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Fixed labor budget
Performance budget
Investor
Capital budget
33. Portion of the profits the organization keeps in-house to use in support of its mission.
Capital structure ratios
Retained earnings
Cost Accounting
Capital structure decision
34. 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.
Horizontal analysis
Comparative approach
Expenses
Contribution margin
35. What a series of equal payments in the future is worth today taking into account the time value of money.
FV
Present value of an annuity
Non-operating expenses
Times interest earned
36. 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
SWOT analysis
Revenue budget
Depreciation
Acid test ratio
37. Financing used expressly for the purchase of non-current assets.
Non-current liabilities
Capital financing
Effectiveness
Market rate of interest
38. 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.
Co-payments
Balance sheet
Compounding
Expense cost variance
39. 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.
Revenue budget
Present value of an annuity
Transaction
Discounted cash flows
40. A security whose interest rate does not change during the lifetime of the bond.
Hedge
Fixed (interest) rate debt
Direct costs
Net accounts receivable
41. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Equity financing
IRR
Fixed Asset Turnover
Capital structure decision
42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Statement of operations
Restricted donation
Step-down method
Strategic decisions
43. Full-time equivalent employees. Two half-time employees equal one FTE.
FTE
Expansion decisions
Cash flows from operating activities
Return on net assets
44. Price times total quantity.
Total revenue
MV
Realization principle
Activity ratios
45. Directly related to the purposes of the organization and the delivery of services
Coupon rate
Mission Center
Allocation base
Fixed assets
46. Amounts due to the organization from patients - third parties - and others.
Accounts receivable
Net present value
Donor
Discounted cash flows
47. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Statement of changes in net assets
Leverage
Deferred revenues
48. Stated interest rate on a bond - as promised by the issuer.
Short-term financing
Total revenue
Coupon rate
Parent organization
49. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Non-operating income
Fixed supplies budget
Allocation base
Dividends
50. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Accumulated depreciation
Assets
Expense budget
Asset Management ratios