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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 cost of activities that take place to produce the final cost object






2. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






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






4. 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.






5. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






6. The increase in the value of an investment from the time it is purchased until the time it is sold.






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






8. 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.






9. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






10. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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






12. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






13. 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.






14. An entity that owns other companies.






15. 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.






16. How an organization chooses to finance its working capital needs.






17. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






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






19. 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.






20. The difference between current assets and current liabilities.






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






22. 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.






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






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






25. The current traded rate for similar risk securities.






26. Price times total quantity.






27. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






28. 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






29. 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.






30. 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.






31. 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






32. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






33. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






34. 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.






35. 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.






36. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






37. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






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






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






41. [Net Accounts Receivable/(Revenue/356)]






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






43. Capital investment decisions designed to increase an organization's strategic position.






44. 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






45. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






46. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






47. Ratios designed to answer the question: How profitable is the organization?






48. 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.






49. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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