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Test your basic knowledge |
ACCA Financial Management
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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. A security whose interest rate does not change during the lifetime of the bond.
Bond rating
Mutually exclusive projects
Cost Accounting
Fixed (interest) rate debt
2. The amount of supplies used to provide a service or good.
Cost of goods sold
Non-regular cash flows
Days cash on hand
Expense volume variance
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.
Administrative cost centers
Line-item budget
Liquidity
Billing float
4. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Net Assets
Indirect costs
Income from investments
Allowance for uncollectibles
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
Billing float
Accrual basis of accounting
Not-for-profit
Incremental cash flows
6. Expenses that have been incurred - but not yet paid.
Revenue rate variance
Increase in unrestricted net assets
Accrued expenses
Depreciation
7. The degree of dispersion of responsibility within an organization. See also Centralization.
For-profit
SWOT analysis
Decentralization
Incremental cash flows
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.
Expense volume variance
Line-item budget
Compounding
Non-current assets
9. Recording expenses associated with making revenue at the same time as revenues are recognized
Realization principle
Matching principle
Strategic planning
Line-item budget
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.
Properties and equipment - net
Base Budget
Operating cash flows
Net present value
11. Financial and non-financial standards against which organizational performance is measured.
Cash flows from financing activities
Net proceeds from a bond issuance
Asset Management ratios
Performance measure
12. Revenue is recorded when goods or services are delivered
Cost centers
Time value of money
Fixed labor budget
Realization principle
13. A method by which the organization develops its strategies and budgets to meet future financial targets.
Strategic financial planning
Tangible assets
Lender
Fixed labor budget
14. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Expansion decisions
Activity ratios
Other income
Collateral
15. The amount of time between when an organization receives a service and pays for it.
Discounting
Statement of changes in net assets
Operating income
Disbursement float
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.
IRR
Non-operating ratio
Bad debt
Direct costs
17. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
SWOT analysis
Discounting
Permanently restricted net assets
Fixed (interest) rate debt
18. A situation in which if one project is implemented the other(s) will not be.
Bond rating
Operating budget
Cost avoidance
Mutually exclusive projects
19. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Coupon
Bond rating agency
Mail float
Coupon payment
20. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Net working capital
Fully allocated costs
Certainty
21. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Other revenues
Contribution margin
Common costs
Liquidity ratios
22. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Responsibility center
Other expenses
Net Assets to Total Assets
Cost of capital
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.
Disbursement float
Coupon rate
Expense cost variance
Long-term investments
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
Deferred revenues
Net patient service revenue
ABC
G & A expenses
25. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Payback
Direct costs
Income from investments
Controlling activities
26. A budget in which line items are presented by program.
Program budget
Cost centers
Comparative approach
Cash flows from operating activities
27. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Net assets released from restriction
Deferred revenues
G & A expenses
Mutually exclusive projects
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.
Common costs
Other expenses
Capital appreciation
Investment grade
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.
Working capital
Expense volume variance
Fixed asset turnover
Mission statement
30. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Properties and equipment
Annuity
Non-current liabilities
31. Amounts due to the organization from patients - third parties - and others.
Bond rating
Capital appreciation
Accounts receivable
Lease
32. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Working capital
Capital
Expense volume variance
Properties and equipment
33. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Mortgage bonds
Investor
Long-term investments
Not-for-profit
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
Compounding
Cash basis of accounting
Times interest earned
Return on total assets
35. The costs of a service after taking into account its direct and fair share of allocated costs.
Fully allocated costs
Performance budget
Expenses
Liabilities
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.
FV
Investment centers
Bad debt
Profitability ratios
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.
Investment grade
Quick ratio
Annuity
Financing mix
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).
Fixed supplies budget
Coupon
Investment grade
Allocation base
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.
Performance budget
Cost of capital
Investment grade
Excess of revenues over expenses
40. Donated assets that have restrictions on their use which will never be removed.
Decentralization
Expenses
Permanently restricted net assets
Cost object
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.
Effectiveness
Long-term debt - net of current portion
Creditor
Service 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.
Non-operating expenses
Liabilities
Fixed asset turnover
Other support
43. Financing that will be paid back in less than one year.
Lease
Operating cash flows
Short-term financing
Disbursement float
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.
Net accounts receivable
Basic accounting equation
Bonds
Short-term financing
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.
Increase in unrestricted net assets
Cash flows from investing activities
Responsibility center
Net assets to total assets
46. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Top-down budgeting
Accrual basis of accounting
Cash flows from investing activities
Ending 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.
Financing activities
Expense budget
Efficiency
Budget
48. Gross proceeds less the underwriter's fee and other issuance fees.
Issuer
Net proceeds from a bond issuance
Asset Management ratios
Mail float
49. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Asset mix
Bad debt
Non-current assets
Expenses
50. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Cost of goods sold
Fixed asset turnover
Cash flows from financing activities