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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. 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






2. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






4. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






5. Revenues of the organization earned in non-healthcare related activities.






6. 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.






7. The purchase of assets with contributed and internally generated funds. See also Debt financing.






8. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






9. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






10. Responsibility centers responsible for making a certain return on investments.






11. 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.






12. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






13. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






14. How an organization chooses to finance its working capital needs.






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






16. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






17. 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






18. 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.






19. 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.






20. (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.






21. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






22. 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.






23. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






24. Revenues generated from an organization's operating activities.






25. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






26. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






27. A good or service provided in return for some type of compensation.






28. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






29. A certificate attached to a bond representing the amount of interest to be paid to the holder.






30. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






31. [Total assets/Net Assets]






32. Expenses that have been incurred - but not yet paid.






33. Private entity or individual who makes a donation






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






35. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






36. An entity that owns other companies.






37. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






38. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






39. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






40. 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.






41. The cost of the supplies on hand at the beginning of the year.






42. The absence of risk in an investment.






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






44. [(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






45. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






47. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






48. 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.






49. [Total Liabilities/ Net assets]






50. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.