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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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 process of distributing service center costs to mission centers - to determine the full cost of each mission center
Amortization of a loan
Statement of operations
Allocation
Revenue budget
2. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Liquidity
Current assets
Capital investment decisions
Temporarily restricted net assets
3. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Operating margin
Cost object
Revenue budget
Responsibility center
4. A situation in which if one project is implemented the other(s) will not be.
Mutually exclusive projects
Expense volume variance
Leverage
Administrative cost centers
5. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
ROI
Administrative cost centers
Other expenses
Mission Center
6. 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.
Lease
Asset Management ratios
Compounding
Mission Center
7. 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.
Budget
Short-term financing
Fixed costs
Performance measure
8. 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.
Performance budget
Compounding
Traditional profit centers
Acid test ratio
9. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Prepaid assets
Decentralization
Single/Simple Step
Billing - collections - and disbursement policies and procedures
10. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Long-term financing
Fixed Asset Turnover
MV
Capital financing
11. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Liquidity ratios
Debt service coverage
Cost avoidance
Present value of an annuity
12. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and
Parent organization
Budget variance
Expense volume variance
Fixed costs
13. (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
Tax-exempt bonds
Operating expenses
Administrative cost centers
IRR
14. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).
Total revenue
Deferred revenues
Statement of cash flows
Capital structure decision
15. [(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.
Quick ratio
Expense cost variance
Tax-exempt bonds
Administrative cost centers
16. 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.
Controlling activities
Precautionary purposes
Cost centers
Accumulated depreciation
17. {[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).
Days cash on hand
Program budget
Fixed assets
Not-for-profit
18. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Operating income
Discounting
Net Assets to Total Assets
Mortgage bonds
19. 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
Co-payments
Collections policies and procedures
Statement of operations
Fixed assets
20. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Long-term investments
Investment centers
Clinical cost centers
Cash equivalents
21. Properties and equipment less accumulated depreciation.
Administrative cost centers
Properties and equipment - net
Average payment period
Fully allocated costs
22. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Bonds
Fixed (interest) rate debt
Clinical cost centers
23. The current traded rate for similar risk securities.
Revenue rate variance
Strategic decisions
Debt service coverage
Market rate of interest
24. 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
Long-term financing
Top-down budgeting
Breakeven point
Total revenue
25. 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.
Transaction
Hedge
Allocation base
Strategic planning
26. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Revenue rate variance
Days cash on hand
Top-down budgeting
27. 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.
Payback
Dividends
Long-term financing
Centralization
28. Portion of the profits the organization keeps in-house to use in support of its mission.
Total asset turnover
Discounted cash flows
Discount rate
Retained earnings
29. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Time value of money
Capital budget
Budget
Comparative approach
30. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Asset mix
For-profit
MV
31. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Cost of capital
Net proceeds from a bond issuance
Budget variance
Volume diversity
32. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Co-payments
Capital investment decisions
Long-term financing
Performance budget
33. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Accountability
Spillover cash flows
Fixed (interest) rate debt
Lease
34. The rise in an economy's general level of prices.
Inflation
Revenues
Activity ratios
Restricted donation
35. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Product diversity
SWOT analysis
Non-operating ratio
Non-operating expenses
36. The difference between current assets and current liabilities.
Investor
Opportunity cost
Activity ratios
Net working capital
37. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Capital
Periodic payments
Cash flows from financing activities
Acid test ratio
38. Non-operating income.
Other income
Matching principle
Total asset turnover
Fixed assets
39. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Total asset turnover
IRR
Return on total assets
Discount rate
40. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Efficiency
Cash equivalents
Performance budget
Discount rate
41. The expenses incurred from an organization's operating activities.
Certainty
Budget variance
Operating expenses
Amortization of a loan
42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Cost of capital
Payback
Billing - collections - and disbursement policies and procedures
Restricted donation
43. Supplementing traditional sources of revenue with new sources.
Net assets to total assets
Excess of revenues over expenses
Matching principle
Revenue enhancement
44. 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.
Strategic planning
Loan amortization schedule
Properties and equipment - net
Net present value
45. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Non-operating revenues
Mail float
Periodic payments
46. 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.
Net proceeds from a bond issuance
Discounted cash flows
Bond rating agency
Collection float
47. An entity that owns other companies.
Cash flows from investing activities
Fixed costs
Parent organization
Prepaid assets
48. What a series of equal payments in the future is worth today taking into account the time value of money.
Capital structure ratios
Tangible assets
Present value of an annuity
Asset Turnover Ratio
49. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Mutually exclusive projects
Non-operating income
For-profit
Asset Management ratios
50. 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
Current liabilities
Co-payments
Properties and equipment
Strategic decisions