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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. Donated assets that have restrictions on their use which will never be removed.






2. 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.






3. The cost of activities that take place to produce the final cost object






4. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






5. 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.






6. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






7. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






9. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






10. {current liabilities/[(total expenses






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






12. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






13. 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






14. 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.






15. The revenue and expense budgets of an organization.






16. 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.






17. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






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






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






20. Private entity or individual who makes a donation






21. 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.






22. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






23. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






25. The total amount of multiyear debt due in future years.






26. 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.






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






28. 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.






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






30. The difference between current assets and current liabilities.






31. The degree of dispersion of responsibility within an organization. See also Centralization.






32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






33. A security whose interest rate does not change during the lifetime of the bond.






34. {[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).






35. 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.






36. 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.






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






38. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






39. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






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






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






42. Gross proceeds less the underwriter's fee and other issuance fees.






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






44. 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.






45. 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.






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






47. [(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.






48. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






49. Supplementing traditional sources of revenue with new sources.






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