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ACCA Financial Management
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Subjects
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certifications
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business-skills
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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. Responsibility centers responsible for making a certain return on investments.
Investment centers
Discounted cash flows
Intermediate Cost Object
Performance measure
2. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Multiyear budget
Collections policies and procedures
Cost
Cost centers
3. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Net proceeds from a bond issuance
Capital budget
Liabilities
Working capital
4. 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.
Ratio analysis
Asset Management ratios
Efficiency
Lease
5. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Fixed Asset Turnover
Common costs
Statement of operations
Capital
6. Demonstrates the ability to pay off long term debt
Co-payments
Time value of money
Accountability
Long Term Solvency ratios
7. Expenses that have been incurred - but not yet paid.
Accrued expenses
Average Days Receivable
Accountability
Allowance for uncollectibles
8. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Capital assets
Incremental cash flows
Traditional profit centers
Co-payments
9. An assignment or grading of the likelihood that an organization will not default on a bond.
Investment grade
Financing mix
Bond rating
Step-down method
10. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Accumulated depreciation
ABC
Interest
Basic accounting equation
11. [Surplus/Operating Revenues]
Cash flows from investing activities
Statement of operations
Quick ratio
Profit margin
12. The elapsed time between financial statements. Common accounting periods
Net Assets to Total Assets
Financing mix
Collections policies and procedures
Accounting period
13. A note payable that has as collateral real assets and that requires periodic payments.
Mortgage
Billing - collections - and disbursement policies and procedures
Working capital
Volume diversity
14. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Cash flows from operating activities
Allowance for uncollectibles
For-profit
Profitability ratios
15. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Current ratio
Coupon payment
Book value
Collateral
16. 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.
Step-down method
Investment centers
Equity financing
Statement of changes in net assets
17. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Profitability ratios
Indirect costs
Increase in unrestricted net assets
Allowance for uncollectibles
18. 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.
Service centers
Mortgage bonds
Net present value
Opening inventory
19. The budget used to forecast operating expenses.
Expense budget
Mail float
Beginning inventory
Investor
20. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.
Collection float
Co-payments
Present value of an annuity
Performance budget
21. How an organization chooses to finance its working capital needs.
Certainty
Net accounts receivable
Mail float
Financing mix
22. The difference between current assets and current liabilities.
Effectiveness
ROI
Operating margin
Net working capital
23. The activities of an organization directly related to its main line of business.
Operating activities
Creditor
Capital investment decisions
Cash flows from operating activities
24. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Collection float
Increase in unrestricted net assets
G & A expenses
Fixed asset turnover
25. The cost of the supplies on hand at the beginning of the year.
Net accounts receivable
Direct costs
Accountability
Opening inventory
26. The current traded rate for similar risk securities.
Billing float
Market rate of interest
Accrual basis of accounting
Activity Based Costing
27. The amount of supplies used to provide a service or good.
Operating activities
Compounding
Cost of goods sold
Intermediate Cost Object
28. Stated interest rate on a bond - as promised by the issuer.
Coupon rate
Average Days Receivable
Working capital
Decentralization
29. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Capital structure ratios
Expansion decisions
Fixed costs
Operating expenses
30. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Coupon
Profit margin
Bond rating
IRR
31. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Operating expenses
Lender
Net Assets
Net assets released from restriction
32. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Net accounts receivable
Fixed (interest) rate debt
Cash and cash equivalents
Discounting
33. 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.
Administrative cost centers
Budget
Balance sheet
Creditor
34. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Net Assets to Total Assets
Line of credit
Increase in unrestricted net assets
Transaction
35. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Expenses
Present value of an annuity
Capital financing
SWOT analysis
36. The section of the expense budget that forecasts salary and benefits.
Decentralization
Fixed labor budget
Activity ratios
Revenue enhancement
37. Budgets that typically cover two to five years.
Cash basis of accounting
Statement of cash flows
Multiyear budget
Expenses
38. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Payback
G & A expenses
Inflation
Operating activities
39. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.
Footnotes
Lease
Net present value
Cash flows from investing activities
40. Capital investment decisions designed to increase an organization's strategic position.
Present value of an annuity
Statement of operations
Single/Simple Step
Strategic decisions
41. A method by which the organization develops its strategies and budgets to meet future financial targets.
Strategic financial planning
Periodic payments
Statement of cash flows
Loan amortization schedule
42. Each service center
Long-term debt - net of current portion
Single/Simple Step
Operating activities
Market rate of interest
43. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)
Capital budget
Fixed asset turnover
Basis of Allocation
Capital appreciation
44. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Total revenue
Service centers
Long-term debt - net of current portion
Acid test ratio
45. [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.
Operating expenses
Current ratio
Average payment period
Cash flows from operating activities
46. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Temporarily restricted net assets
Cash budget
Bond rating
47. 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.
Discount rate
Operating budget
Lender
MV
48. Return on investment. The percentage gain or loss experienced from an investment.
Lien
Allocation
Operating activities
ROI
49. (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
Permanently restricted net assets
Tax-exempt bonds
Liquidity ratios
Accrued expenses
50. The revenue and expense budgets of an organization.
Cost of goods sold
Cash basis of accounting
Debt to equity
Operating budget