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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. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Centralization
Net assets released from restriction
Ending inventory
Basis of Allocation
2. [(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
Annuity
Mortgage bonds
Expense volume variance
SWOT analysis
3. What a series of equal payments in the future is worth today taking into account the time value of money.
Cash flows from investing activities
Line of credit
Present value of an annuity
Asset Turnover Ratio
4. Debt to be paid off in a period longer than one year.
Asset Management ratios
Donation
Return on total assets
Long-term financing
5. 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.
Revenues
Compounding
Financing activities
Mortgage
6. How an organization chooses to finance its working capital needs.
Financing mix
Allocation
Revenue budget
Bad debt
7. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
For-profit
Step-down method
Final cost object
Properties and equipment
8. 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.
Excess of revenues over expenses
Float
Ending inventory
Net Assets to Total Assets
9. 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.
Retained earnings
Direct costs
Collections policies and procedures
Billing float
10. The increase in the value of an investment from the time it is purchased until the time it is sold.
Product diversity
Capital appreciation
Effectiveness
Expense cost variance
11. [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.
Co-payments
Operating activities
Current ratio
ABC
12. Financing that will be paid back in less than one year.
Cash equivalents
Revenue budget
Disbursement float
Short-term financing
13. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Time value of money
SWOT analysis
Debt to equity
Expense volume variance
14. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Mail float
Expenses
Accrued expenses
Product diversity
15. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Prepaid assets
Lender
Balance sheet
Product diversity
16. Highly liquid current assets such as interest-bearing savings and checking accounts.
Coupon
Cash equivalents
Multiyear budget
Parent organization
17. [Total Revenues/ Total Assets]
Decentralization
Asset Turnover Ratio
Current assets
Billing - collections - and disbursement policies and procedures
18. 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.
Lender
Liabilities
Other income
Revenue budget
19. The ease and speed with which an asset can be turned into cash.
Cost Accounting
Coupon
Co-payments
Liquidity
20. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.
Controlling activities
Balance sheet
Liabilities
Performance measure
21. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Footnotes
Non-regular cash flows
Mortgage
Net increase (decrease) in cash and cash equivalents
22. An entity that owns other companies.
Parent organization
Accounting period
Bond rating agency
Indirect costs
23. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.
Bonds
Loan amortization schedule
Current ratio
Mission statement
24. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Fixed supplies budget
Realization principle
Budget variance
Capital
25. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Strategic financial planning
Present value of an annuity
Base Budget
Volume diversity
26. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Total asset turnover
Other support
Final cost object
Non-regular cash flows
27. [Surplus/Operating Revenues]
Decentralization
Average payment period
Cash flows from financing activities
Profit margin
28. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Strategic planning
Administrative cost centers
Capital budget
Lease
29. 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.
Mission statement
Revenues
Cost centers
Acid test ratio
30. 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.
Footnotes
Balance sheet
Restricted donation
Cash flows from financing activities
31. The rise in an economy's general level of prices.
Inflation
Financing mix
Expenses
Hedge
32. Expenses that have been incurred - but not yet paid.
Clinical cost centers
Bond rating agency
Accrued expenses
Capital structure decision
33. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Interest
Net increase (decrease) in cash and cash equivalents
MV
Bonds
34. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Cost
Liquidity
Accounts payable
Indirect costs
35. 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.
Comparative approach
Revenue enhancement
Short-term financing
Capital investment decisions
36. Operating income not reported elsewhere under revenues - gains - and other support.
Fixed assets
Allocation
Other revenues
Collection float
37. [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).
SWOT analysis
Fixed Asset Turnover
Capital financing
Notes payable
38. The idea that a dollar today is worth more than a dollar in the future.
Time value of money
Statement of operations
Non-operating expenses
Accounting period
39. 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.
Responsibility center
Working capital
Accrual basis of accounting
Temporarily restricted net assets
40. 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.
Payback
Capital budget
Fixed assets
Administrative profit centers
41. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Statement of operations
Operating budget
Net increase (decrease) in cash and cash equivalents
Service centers
42. A method by which the organization develops its strategies and budgets to meet future financial targets.
Capital structure decision
Opening inventory
Strategic financial planning
Parent organization
43. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Issuer
Efficiency
Coupon payment
Revenue budget
44. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Coupon
Lease
Cash equivalents
45. Current assets. Net working capital equals current assets –current liabilities.
Multiyear budget
Working capital
Capital structure ratios
Discounting
46. The section of the expense budget that forecasts salary and benefits.
Fixed labor budget
Controlling activities
Not-for-profit
Net assets released from restriction
47. 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.
Discount rate
Co-payments
Accounting period
Ratio analysis
48. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Footnotes
Ending inventory
Expense budget
Capital investment decisions
49. Supplementing traditional sources of revenue with new sources.
Present value of an annuity
Revenue enhancement
Precautionary purposes
Time value of money
50. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Working capital
Long-term investments
Non-operating revenues
Net Assets to Total Assets