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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. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






2. 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






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






4. 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.






5. {current liabilities/[(total expenses






6. The revenue and expense budgets of an organization.






7. The section of the expense budget that forecasts salary and benefits.






8. A transaction that reduces the risk of an investment.






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






10. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






11. 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.






12. Assets that have a physical presence.






13. A note payable that has as collateral real assets and that requires periodic payments.






14. Financial and non-financial standards against which organizational performance is measured.






15. The budget used to forecast operating expenses.






16. A certificate attached to a bond representing the amount of interest to be paid to the holder.






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






18. The expenses incurred from an organization's operating activities.






19. The degree to which standards are met.






20. [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?






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






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






23. 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.






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






25. What a series of equal payments in the future is worth today taking into account the time value of money.






26. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






27. Properties and equipment less accumulated depreciation.






28. 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.






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






30. 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.






31. 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






32. Service center costs are allocated to both mission centers and other service centers






33. Expenses of the organization incurred in non-health-care related activities.






34. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






35. 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.






36. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






37. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






38. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






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






41. [Total Liabilities/ Net assets]






42. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






43. Current assets. Net working capital equals current assets –current liabilities.






44. 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.






45. 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.






46. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






48. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






49. The elapsed time between financial statements. Common accounting periods






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