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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 idea that a dollar today is worth more than a dollar in the future.






2. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






3. 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.






4. 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.






5. 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.






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






7. 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.






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






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






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






11. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






12. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






13. An investment that generates an annuity for an indefinite period of time - basically forever.






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






15. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






17. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






18. 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.






19. 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.






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






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. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






23. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






24. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






25. [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).






26. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






27. [Total Revenues/ Total Assets]






28. Amounts earned by the organization from the provision of service or sale of goods.






29. Financial and non-financial standards against which organizational performance is measured.






30. The increase in the value of an investment from the time it is purchased until the time it is sold.






31. A security interest in one or more assets granted to lenders in a secured loan.






32. What a series of equal payments in the future is worth today taking into account the time value of money.






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






34. [Total Liabilities/ Net assets]






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






36. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






37. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






38. Costs that are traced to a cost object. See also Indirect costs and Cost object.






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






40. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






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






42. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






43. Operating income not reported elsewhere under revenues - gains - and other support.






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






45. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






46. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






47. [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).






48. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






49. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






50. Budgets that typically cover two to five years.