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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. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






2. (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.






3. An entity that owns other companies.






4. 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.






5. A legal obligation to pay the holder of the note or lien.






6. Being subject to sanctions with respect to carrying out responsibilities.






7. 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.






8. 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






9. Demonstrates the ability to pay off long term debt






10. Current assets. Net working capital equals current assets –current liabilities.






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






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






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






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






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






16. Amounts the organization is obligated to pay others - including suppliers and creditors.






17. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






18. The amount of time between when an organization receives a service and pays for it.






19. 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.






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






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






22. 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.






23. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






24. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






25. (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;






26. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






27. 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.






28. 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.






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






30. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






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






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






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






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






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






36. Budgets that typically cover two to five years.






37. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






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. 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.






40. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






41. 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






42. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






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






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






45. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






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






47. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






48. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






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






50. 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.