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






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






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






4. The amount of supplies used to provide a service or good.






5. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






6. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






7. Revenues generated from an organization's operating activities.






8. 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.






9. (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






10. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






11. 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.






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






13. The percentage of each asset relative to total assets.






14. 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






15. [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?






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






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






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






19. Budgets that typically cover two to five years.






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






21. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






22. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






23. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






24. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






25. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






26. Highly liquid current assets such as interest-bearing savings and checking accounts.






27. A budget in which line items are presented by program.






28. Non-operating income.






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






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






31. [Inventory/ (Cost of Goods Sold/365)]






32. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






33. 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.






34. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






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






37. 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.






38. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






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






40. Financing used expressly for the purchase of non-current assets.






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






42. [Total Liabilities/ Net assets]






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






44. Donated assets that have restrictions on their use which will never be removed.






45. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






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






47. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






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






49. Capital investment decisions designed to increase the operational capability of a health care organization.






50. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.







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