Test your basic knowledge |

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. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






2. 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






3. The changes in cash resulting from the normal operating activities of the organization.






4. A security whose interest rate does not change during the lifetime of the bond.






5. 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.






6. The ease and speed with which an asset can be turned into cash.






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






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






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






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






11. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






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






13. The absence of risk in an investment.






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






15. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






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






17. 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.






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






19. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






20. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






22. 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.






23. An entity that gives capital to another entity in expectation of a financial or non-financial return.






24. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






25. The cash flows derived from an organization's operating activities.






26. Previously restricted assets no longer restricted because the terms of the restriction have been met.






27. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






28. {[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).






29. A security interest in one or more assets granted to lenders in a secured loan.






30. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






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






32. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






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






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






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






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






37. 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).






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






39. 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.






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






41. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






43. An organization's financial obligations that are to be paid within one year.






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






45. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






46. 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






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






48. (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;






49. 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.






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