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






2. 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






3. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






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






7. 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.






8. Budgets that typically cover two to five years.






9. 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.






10. 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.






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






12. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






13. [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).






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






15. 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.






16. [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.






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






18. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






19. 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.






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






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






22. Non-operating income.






23. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






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






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 percentage of each asset relative to total assets.






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






28. 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.






29. [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).






30. Assets = Liabilities + Net Assets (aka Equity).






31. The degree to which standards are met.






32. A budget in which line items are presented by program.






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






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






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






36. Proceeds lost by foregoing other opportunities.






37. Portion of the profits the organization keeps in-house to use in support of its mission.






38. 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.






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






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






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






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






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






44. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






46. 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.






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






48. The difference between current assets and current liabilities.






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






50. [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?