Test your basic knowledge |

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. 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.






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






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






4. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






6. 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.






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






8. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






9. Return on investment. The percentage gain or loss experienced from an investment.






10. Debt to be paid off in a period longer than one year.






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






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






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






14. Capital investment decisions designed to increase the operational capability of a health care organization.






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






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






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






18. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






19. Revenues of the organization earned in non-healthcare related activities.






20. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






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






23. [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).






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






25. Responsibility centers responsible for making a certain return on investments.






26. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






27. The total amount of multiyear debt due in future years.






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






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






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






31. [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.






32. Stated interest rate on a bond - as promised by the issuer.






33. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






34. Private entity or individual who makes a donation






35. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






36. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






37. [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).






38. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






39. An entity that is owed money for lending funds or supplying goods or services on credit.






40. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






41. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






42. 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.






43. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






44. 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.






45. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






46. Amounts earned by the organization from the provision of service or sale of goods.






47. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






48. The income (operating revenues -operating expenses) earned in non-health-care related activities.






49. 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.






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