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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 planning process that identifies the organization's mission and strategy in order to position itself for the future.






2. The idea that a dollar today is worth more than a dollar in the future.






3. 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.






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.






5. The income (operating revenues -operating expenses) earned in non-health-care related activities.






6. Non-operating income.






7. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






8. 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






9. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






10. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






11. Stated interest rate on a bond - as promised by the issuer.






12. A situation in which if one project is implemented the other(s) will not be.






13. 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.






14. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






15. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






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






18. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






19. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






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






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






22. 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.






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






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






25. The difference between current assets and current liabilities.






26. The budget used to forecast operating expenses.






27. Financing that will be paid back in less than one year.






28. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






29. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






30. The revenue and expense budgets of an organization.






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






32. 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.






33. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






34. The activities of an organization directly related to its main line of business.






35. 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.






36. 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.






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






38. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






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






40. 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.






41. 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.






42. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






43. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






44. Costs that are traced to a cost object. See also Indirect costs and Cost object.






45. Amounts the organization is obligated to pay others - including suppliers and creditors.






46. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






48. 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.






49. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






50. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia