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






2. Assets that have a physical presence.






3. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






4. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






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






6. 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






7. An entity that gives capital to another entity in expectation of a financial or non-financial return.






8. [(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.






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






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






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






12. 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.






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






14. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






15. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






16. [Total Liabilities/ Net assets]






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






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






19. 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






20. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






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






22. [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).






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






24. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






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






26. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






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






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






29. 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.






30. [(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






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






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






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






34. [Inventory/ (Cost of Goods Sold/365)]






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






36. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






37. The current traded rate for similar risk securities.






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






39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






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






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






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






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






44. Assets = Liabilities + Net Assets (aka Equity).






45. Series of payments over time - such as interest paid to bondholders.






46. The difference between what was planned (budgeted) and what was achieved (actual).






47. The cost of the supplies on hand at the beginning of the year.






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






49. Revenue is recorded when goods or services are delivered






50. 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.