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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. 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.






3. The cost of activities that take place to produce the final cost object






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






5. [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).






6. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






7. Service center costs are allocated to both mission centers and other service centers






8. Revenue is recorded when goods or services are delivered






9. 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.






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.






11. [Net Accounts Receivable/(Revenue/356)]






12. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






13. Price times total quantity.






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






15. The cash flows derived from an organization's operating activities.






16. Expenses of the organization incurred in non-health-care related activities.






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






18. 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?






19. Financing that will be paid back in less than one year.






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






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






22. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






23. The activities of an organization directly related to its main line of business.






24. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






25. 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.






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






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






28. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






29. A method by which the organization develops its strategies and budgets to meet future financial targets.






30. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






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






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






33. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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






35. (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.






36. The total amount of multiyear debt due in future years.






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






38. An entity that sells bonds in order to raise money.






39. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






40. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






42. Ratios designed to answer the question: How profitable is the organization?






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






44. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






45. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






46. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






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. 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.






50. Literally non-movable assets. Generally used to refer to buildings and equipment.