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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. An entity that owns other companies.






2. 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.






3. 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.






4. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






5. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






6. [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.






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






8. 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.






9. The rise in an economy's general level of prices.






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






11. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






12. 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.






13. [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).






14. The budget used to forecast operating expenses.






15. Expenses of the organization incurred in non-health-care related activities.






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






17. Full-time equivalent employees. Two half-time employees equal one FTE.






18. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






20. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






21. 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.






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






23. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






24. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






25. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






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






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






28. [(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.






29. 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






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






31. 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






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






33. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






34. [Total assets/Net Assets]






35. Literally non-movable assets. Generally used to refer to buildings and equipment.






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






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






38. Financial obligations that will be paid off over a time period longer than one year






39. Price times total quantity.






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






41. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






43. 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.






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






45. The expenses incurred from an organization's operating activities.






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






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






48. 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.






49. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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