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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. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






2. 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.






3. 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.






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






5. Supplementing traditional sources of revenue with new sources.






6. The revenue and expense budgets of an organization.






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






8. The absence of risk in an investment.






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






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






11. Assets that have a physical presence.






12. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






13. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






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






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






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






17. 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






18. 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)






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






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






21. Portion of the profits the organization keeps in-house to use in support of its mission.






22. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






23. An entity that owns other companies.






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






25. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






26. Irregular cash flows - typically occurring at the end of the life of a project.






27. [Total Liabilities/ Net assets]






28. The ease and speed with which an asset can be turned into cash.






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






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






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






32. Proceeds lost by foregoing other opportunities.






33. The cash flows derived from an organization's operating activities.






34. 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






35. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






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






37. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






38. 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.






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






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






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






42. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






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






45. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






46. An assignment or grading of the likelihood that an organization will not default on a bond.






47. Demonstrates the ability to pay off long term debt






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






49. [(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.






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