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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.
  • 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. A security whose interest rate does not change during the lifetime of the bond.






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






3. 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.






4. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






5. 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






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






7. The degree of dispersion of responsibility within an organization. See also Centralization.






8. 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.






9. Recording expenses associated with making revenue at the same time as revenues are recognized






10. 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.






11. Financial and non-financial standards against which organizational performance is measured.






12. Revenue is recorded when goods or services are delivered






13. A method by which the organization develops its strategies and budgets to meet future financial targets.






14. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






16. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






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






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






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






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






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






22. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






23. 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.






24. 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






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






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






27. Previously restricted assets no longer restricted because the terms of the restriction have been met.






28. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






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.






30. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






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






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






34. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






35. The costs of a service after taking into account its direct and fair share of allocated costs.






36. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






37. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






38. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






39. 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.






40. Donated assets that have restrictions on their use which will never be removed.






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.






42. 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.






43. Financing that will be paid back in less than one year.






44. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






45. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






46. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






47. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






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






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






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