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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. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






2. 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.






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






4. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






5. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






7. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






8. Irregular cash flows - typically occurring at the end of the life of a project.






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






10. 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






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






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






13. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






14. 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.






15. Revenue is recorded when goods or services are delivered






16. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






17. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






18. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






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






20. 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.






21. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






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






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






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






25. 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






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






27. 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.






28. The cost of activities that take place to produce the final cost object






29. An investment that generates an annuity for an indefinite period of time - basically forever.






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






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






32. Series of payments over time - such as interest paid to bondholders.






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






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






35. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






36. How an organization chooses to finance its working capital needs.






37. 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.






38. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






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






41. What a series of equal payments in the future is worth today taking into account the time value of money.






42. Highly liquid current assets such as interest-bearing savings and checking accounts.






43. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






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






46. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






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






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






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






50. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).







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