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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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 system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






2. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






3. Supplementing traditional sources of revenue with new sources.






4. 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






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






6. [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?






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






8. The activities of an organization directly related to its main line of business.






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






10. 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.






11. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






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






13. The section of the expense budget that forecasts salary and benefits.






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






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






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






17. The cash flows derived from an organization's operating activities.






18. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






19. 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.






20. 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.






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






22. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






23. The difference between what was planned (budgeted) and what was achieved (actual).






24. Each service center






25. 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.






26. The degree to which standards are met.






27. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






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






30. The amount of time between when an organization receives a service and pays for it.






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






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






33. The cost of activities that take place to produce the final cost object






34. Service center costs are allocated to both mission centers and other service centers






35. 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.






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






37. 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.






38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






39. [(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






40. Amounts due to the organization from patients - third parties - and others.






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






42. The ease and speed with which an asset can be turned into cash.






43. A transaction that reduces the risk of an investment.






44. An organization's financial obligations that are to be paid within one year.






45. Irregular cash flows - typically occurring at the end of the life of a project.






46. 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.






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






48. [Total assets/Net Assets]






49. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






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






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