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ACCA Financial Management
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
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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 costs of a service after taking into account its direct and fair share of allocated costs.
Issuer
Disbursement float
Fully allocated costs
Amortization of a loan
2. Expenses that have been incurred - but not yet paid.
Net assets released from restriction
Cost
Discounting
Accrued expenses
3. 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.
Product diversity
Cost Accounting
Administrative cost centers
Leverage
4. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Intermediate Cost Object
Incremental cash flows
Current assets
Average Days Receivable
5. The cost of the supplies on hand at the beginning of the year.
Long-term financing
Activity ratios
Opening inventory
Investor
6. The elapsed time between financial statements. Common accounting periods
Operating activities
Present value of an annuity
Accounting period
Investment grade
7. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net increase (decrease) in cash and cash equivalents
Average Days Inventory
Hedge
Collection float
8. 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).
Expansion decisions
Cost of goods sold
Deferred revenues
Disbursement float
9. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Equity financing
Spillover cash flows
Debt service coverage
10. Recording expenses associated with making revenue at the same time as revenues are recognized
Controlling activities
Investment grade
Matching principle
Discounting
11. Revenues generated from an organization's operating activities.
Operating revenues
Volume diversity
Statement of cash flows
Ending inventory
12. Demonstrates the ability to pay off long term debt
Donor
Transaction
Long Term Solvency ratios
Revenue budget
13. [Surplus/Operating Revenues]
Profit margin
Not-for-profit
Capital budget
Effectiveness
14. 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.
Billing float
Liabilities
Long Term Solvency ratios
Bad debt
15. 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.
Notes payable
Fully allocated costs
Cash flows from investing activities
Capital assets
16. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Cash and cash equivalents
Operating cash flows
Fixed assets
G & A expenses
17. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Intermediate Cost Object
G & A expenses
Float
Capital investment decisions
18. {[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
Certainty
Tax-exempt bonds
Current liabilities
19. Revenues of the organization earned in non-healthcare related activities.
Non-operating revenues
Capital financing
Bond rating
Line of credit
20. 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.
Statement of changes in net assets
Cost Accounting
Market rate of interest
Cash equivalents
21. [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?
Capital financing
Total asset turnover
Accountability
Comparative approach
22. The budget used to forecast operating expenses.
Present value of an annuity
Disbursement float
Expense budget
Spillover cash flows
23. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Billing float
Base Budget
Assets
Long-term debt to net assets ratio
24. 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.
Collections policies and procedures
Capital assets
Controlling activities
Expenses
25. An entity that sells bonds in order to raise money.
Co-payments
Issuer
Long-term investments
Dividends
26. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Debt to equity
Financing mix
Net accounts receivable
Income from investments
27. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.
Line-item budget
Investment grade
Profit margin
Activity Based Costing
28. The cash flows derived from an organization's operating activities.
Net patient service revenue
Operating revenues
Net proceeds from a bond issuance
Operating cash flows
29. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Mutually exclusive projects
MV
Long-term financing
30. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Tax-exempt bonds
SWOT analysis
Breakeven point
Fixed labor budget
31. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Budget variance
Breakeven point
Revenue rate variance
Bond rating agency
32. 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.
Clinical cost centers
Budget variance
Investor
Cost
33. Private entity or individual who makes a donation
Donor
Current assets
Capital assets
Other income
34. 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
Lien
ABC
Disbursement float
Fixed costs
35. 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.
Line-item budget
Mission Center
Intermediate Cost Object
Mission statement
36. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Operating expenses
Accounting period
Net working capital
Activity Based Costing
37. 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.
Non-operating income
Investment grade
Balance sheet
Cost centers
38. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Cost
Direct costs
Capital appreciation
Ending inventory
39. Financial obligations that will be paid off over a time period longer than one year
ROI
Collections policies and procedures
Non-current liabilities
Fixed (interest) rate debt
40. 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
Non-current liabilities
Short-term financing
Accounting period
Statement of operations
41. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income
SWOT analysis
Debt service coverage
Fully allocated costs
Non-regular cash flows
42. A method by which the organization develops its strategies and budgets to meet future financial targets.
Allocation base
Long-term investments
Strategic financial planning
Allocation
43. Return on investment. The percentage gain or loss experienced from an investment.
Non-regular cash flows
ROI
Net assets to total assets
Controlling activities
44. Revenue is recorded when goods or services are delivered
Efficiency
Realization principle
Leverage
Properties and equipment
45. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Compounding
Multiyear budget
Cash basis of accounting
Deferred revenues
46. 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.
Precautionary purposes
Fixed Asset Turnover
Comparative approach
Cost of capital
47. Amounts earned by the organization from the provision of service or sale of goods.
Basis of Allocation
Breakeven point
Dividends
Revenues
48. 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.
Investment grade
Discount rate
Allocation
Net present value
49. [Total assets/Net Assets]
Line-item budget
Amortization of a loan
Leverage
Present value of an annuity
50. A security interest in one or more assets granted to lenders in a secured loan.
Footnotes
Lien
Efficiency
Basis of Allocation
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