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






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






3. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






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






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






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






7. [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.






8. The absence of risk in an investment.






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






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






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






12. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






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






14. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






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






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






17. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






18. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






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






21. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






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






23. The percentage of each asset relative to total assets.






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






25. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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






27. 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






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






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






30. Portion of the profits the organization keeps in-house to use in support of its mission.






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






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






33. 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.






34. Demonstrates the ability to pay off long term debt






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






36. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






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






38. 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.






39. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






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






41. 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.






42. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






43. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






44. 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.






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






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






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






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






49. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






50. 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.