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Test your basic knowledge |
ACCA Financial Management
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Study First
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. 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.
Cost of capital
Restricted donation
Product diversity
Payback
2. [Net Accounts Receivable/(Revenue/356)]
Hedge
Average Days Receivable
Lease
Average Days Inventory
3. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Operating margin
IRR
Cash flows from financing activities
Fixed asset turnover
4. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Bond rating agency
Total revenue
G & A expenses
5. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Activity ratios
Basic accounting equation
Donor
Fixed supplies budget
6. An assignment or grading of the likelihood that an organization will not default on a bond.
Billing float
Top-down/bottom-up approach
Accounts receivable
Bond rating
7. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
For-profit
Net assets released from restriction
Strategic decisions
Top-down/bottom-up approach
8. Recording expenses associated with making revenue at the same time as revenues are recognized
Discounting
Assets
Operating margin
Matching principle
9. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Co-payments
Lender
FV
Fixed asset turnover
10. 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
Bond rating
Comparative approach
Not-for-profit
ABC
11. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Fixed assets
Mail float
Investment grade
12. 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
Amortization of a loan
Net Assets
Operating expenses
Liabilities
13. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Capital assets
Increase in unrestricted net assets
Other income
14. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Other expenses
Amortization of a loan
Cash equivalents
Billing float
15. Gross proceeds less the underwriter's fee and other issuance fees.
Acid test ratio
Centralization
Accounting period
Net proceeds from a bond issuance
16. 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.
Traditional profit centers
Liquidity ratios
Centralization
Billing float
17. 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.
Administrative profit centers
Performance budget
Cash flows from operating activities
IRR
18. process of measuring the resources (costs) used to produce results.
Cost Accounting
Beginning inventory
Depreciation
Donor
19. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Decentralization
Equity financing
Bad debt
Cash flows from financing activities
20. The absence of risk in an investment.
Creditor
Certainty
Co-payments
Base Budget
21. 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.
Periodic payments
Cost
Net Assets
Depreciation
22. 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.
For-profit
Billing - collections - and disbursement policies and procedures
Net Assets
Average Days Inventory
23. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.
Direct costs
Cash equivalents
Allocation base
Line of credit
24. The revenue and expense budgets of an organization.
Operating budget
Volume diversity
Profitability ratios
Bond rating agency
25. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Opportunity cost
Assets
Cash budget
Final cost object
26. The total amount of multiyear debt due in future years.
Other expenses
Allocation base
Long-term debt - net of current portion
Not-for-profit
27. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.
Book value
Realization principle
Debt to equity
Discount rate
28. 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
Operating budget
Cash flows from investing activities
Decentralization
Effectiveness
29. An entity that owns other companies.
Non-current liabilities
Parent organization
Other support
Expansion decisions
30. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Capital appreciation
Net patient service revenue
Incremental cash flows
Average payment period
31. 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.
Centralization
Lease
Capital assets
Capital appreciation
32. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Debt service coverage
Depreciation
Cash and cash equivalents
33. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Long-term debt - net of current portion
Fixed costs
Cost object
Assets
34. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Accounting period
Statement of operations
Donation
Profitability ratios
35. Revenues generated from an organization's operating activities.
Net increase (decrease) in cash and cash equivalents
Cash equivalents
Billing float
Operating revenues
36. Responsibility centers responsible for making a certain return on investments.
Asset Turnover Ratio
Allocation
Compounding
Investment centers
37. What a series of equal payments in the future is worth today taking into account the time value of money.
Present value of an annuity
Parent organization
Depreciation
Return on total assets
38. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Quick ratio
Cost centers
Accumulated depreciation
Revenue budget
39. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Cost of goods sold
Cash basis of accounting
Intermediate Cost Object
Investor
40. {current liabilities/[(total expenses
Average payment period
Dividends
Beginning inventory
Leverage
41. Service center costs are allocated to both mission centers and other service centers
Financing mix
Cost object
Step Down
Compounding
42. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Accounts receivable
Net present value
Allocation
Net proceeds from a bond issuance
43. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.
Non-operating ratio
Spillover cash flows
Working capital
Line-item budget
44. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.
Accrued expenses
Cash and cash equivalents
Collection float
Capital structure decision
45. Non-operating income.
Dividends
Cost Accounting
Realization principle
Other income
46. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Return on total assets
Financing mix
Activity ratios
Statement of changes in net assets
47. 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.
Matching principle
Administrative profit centers
Debt service coverage
Capital assets
48. The rise in an economy's general level of prices.
Debt to equity
Hedge
Inflation
Cost of goods sold
49. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Cost centers
Net patient service revenue
Opening inventory
Profitability ratios
50. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor
Dividends
Indirect costs
Fixed assets
ABC