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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
business-skills
,
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. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Assets
Basis of Allocation
Liquidity ratios
Issuer
2. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Quick ratio
ABC
Non-operating ratio
Mortgage bonds
3. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Investor
Billing - collections - and disbursement policies and procedures
Realization principle
Accountability
4. The revenue and expense budgets of an organization.
Tax-exempt bonds
Present value of an annuity
Operating budget
Performance budget
5. 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.
Net assets released from restriction
Fixed supplies budget
Capital financing
Payback
6. Irregular cash flows - typically occurring at the end of the life of a project.
Non-regular cash flows
Times interest earned
Parent organization
Annuity
7. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Performance budget
Fixed costs
Long-term financing
Traditional profit centers
8. The degree of dispersion of responsibility within an organization. See also Centralization.
Intermediate Cost Object
Decentralization
Basic accounting equation
Float
9. Being subject to sanctions with respect to carrying out responsibilities.
Basis of Allocation
Accountability
Expense cost variance
Mortgage bonds
10. The elapsed time between financial statements. Common accounting periods
Accounting period
Cash flows from financing activities
Co-payments
Non-operating income
11. [Total assets/Net Assets]
Time value of money
Leverage
Operating activities
Mortgage bonds
12. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Float
Opportunity cost
Operating cash flows
Temporarily restricted net assets
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
Coupon
Average payment period
Tax-exempt bonds
Cash flows from financing activities
14. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Multiyear budget
Interest
Net present value
Allowance for uncollectibles
15. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.
Administrative profit centers
Breakeven point
Non-operating income
Cost Accounting
16. Assets that have a physical presence.
FV
Lender
Net working capital
Tangible assets
17. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Ending inventory
Administrative profit centers
Working capital
Collections policies and procedures
18. The idea that a dollar today is worth more than a dollar in the future.
Quick ratio
Time value of money
Mission Center
Tangible assets
19. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Decentralization
Administrative cost centers
Allocation
Indirect costs
20. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Bad debt
Float
Other expenses
Profitability ratios
21. A note payable that has as collateral real assets and that requires periodic payments.
Asset mix
Non-operating ratio
Mortgage
Ratio analysis
22. 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.
Capital assets
Mission Center
Expenses
Centralization
23. 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.
G & A expenses
Not-for-profit
Expense cost variance
Net present value
24. Non-operating income.
Controlling activities
Long-term investments
Other income
For-profit
25. Amounts the organization is obligated to pay others - including suppliers and creditors.
Operating revenues
Accounts payable
Donor
Increase in unrestricted net assets
26. 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.
Base Budget
Bonds
Operating activities
Fixed labor budget
27. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Long-term debt - net of current portion
Base Budget
Lien
Operating margin
28. Proceeds lost by foregoing other opportunities.
Other expenses
Opportunity cost
Basic accounting equation
Bond rating agency
29. The increase in the value of an investment from the time it is purchased until the time it is sold.
ABC
Capital appreciation
Times interest earned
Revenue rate variance
30. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Operating income
Allocation
Amortization of a loan
Permanently restricted net assets
31. Assets = Liabilities + Net Assets (aka Equity).
Final cost object
Base Budget
Basic accounting equation
Prepaid assets
32. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
For-profit
Beginning inventory
Strategic decisions
Operating budget
33. (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;
Cost Accounting
Return on net assets
Working capital
Average Days Receivable
34. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Coupon rate
Accrued expenses
Direct costs
Co-payments
35. Revenues generated from an organization's operating activities.
Effectiveness
Intermediate Cost Object
Net Assets to Total Assets
Operating revenues
36. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo
Long-term debt to net assets ratio
Tangible assets
Investment centers
Net patient service revenue
37. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?
Co-payments
Non-operating ratio
Statement of cash flows
Operating expenses
38. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Book value
Product diversity
Fixed supplies budget
Operating expenses
39. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Short-term financing
SWOT analysis
Mission statement
40. The percentage of each asset relative to total assets.
Profitability ratios
Current ratio
Base Budget
Asset mix
41. Price times total quantity.
Assets
Non-current liabilities
Liquidity
Total revenue
42. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Beginning inventory
Spillover cash flows
Operating revenues
Expense budget
43. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Coupon payment
Non-current assets
Centralization
Increase in unrestricted net assets
44. The cost of the supplies on hand at the beginning of the year.
Float
Opening inventory
Working capital
Common costs
45. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Collateral
Coupon rate
Donor
46. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Financing activities
Direct costs
Strategic decisions
Net present value
47. 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.
Leverage
Average Days Receivable
Accrued expenses
Budget
48. [(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
FTE
Allocation base
Times interest earned
Donation
49. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Accounts receivable
Responsibility center
Fixed Asset Turnover
Operating margin
50. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Cash basis of accounting
Billing float
Incremental cash flows
Payback