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






2. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






3. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






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






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






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






7. Directly related to the purposes of the organization and the delivery of services






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






9. Full-time equivalent employees. Two half-time employees equal one FTE.






10. Debt to be paid off in a period longer than one year.






11. 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.






12. 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






13. Assets that have a physical presence.






14. 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.






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






16. The expenses incurred from an organization's operating activities.






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






18. The costs of a service after taking into account its direct and fair share of allocated costs.






19. Non-operating income.






20. The purchase of assets with contributed and internally generated funds. See also Debt financing.






21. [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.






22. 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






23. 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.






24. 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.






25. A good or service provided in return for some type of compensation.






26. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






27. 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.






28. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






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






30. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






31. 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.






32. 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.






33. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






34. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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






36. (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






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






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






39. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






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






41. An entity that sells bonds in order to raise money.






42. Properties and equipment less accumulated depreciation.






43. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






44. 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.






45. Proceeds lost by foregoing other opportunities.






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






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






48. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






49. The degree to which standards are met.






50. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.