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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
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certifications
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business-skills
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acca
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 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)
Periodic payments
Operating activities
Financing activities
Basis of Allocation
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
Inflation
Other support
Collection float
Net Assets
3. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
For-profit
Efficiency
Program budget
Annuity
4. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Decentralization
Tax-exempt bonds
Asset Management ratios
SWOT analysis
5. Portion of the profits the organization keeps in-house to use in support of its mission.
G & A expenses
Retained earnings
Current assets
Equity financing
6. The difference between what was planned (budgeted) and what was achieved (actual).
Total asset turnover
Budget variance
Basic accounting equation
Long-term investments
7. A security interest in one or more assets granted to lenders in a secured loan.
Net assets released from restriction
Asset Turnover Ratio
Lien
Mission Center
8. The changes in cash resulting from the normal operating activities of the organization.
Days cash on hand
Cash flows from operating activities
MV
Cost
9. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Cost
Fixed labor budget
Debt service coverage
Mortgage bonds
10. 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
Administrative profit centers
HMO
Statement of cash flows
Liquidity ratios
11. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Allocation
G & A expenses
Interest
Total asset turnover
12. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Fixed (interest) rate debt
G & A expenses
Financing mix
Cost of capital
13. 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).
Deferred revenues
Mission statement
Disbursement float
Effectiveness
14. Full-time equivalent employees. Two half-time employees equal one FTE.
Net increase (decrease) in cash and cash equivalents
Efficiency
Balance sheet
FTE
15. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Co-payments
Return on net assets
Capital assets
Other revenues
16. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Current ratio
Other support
Line-item budget
Basic accounting equation
17. Capital investment decisions designed to increase the operational capability of a health care organization.
Acid test ratio
Short-term financing
Expansion decisions
Liquidity ratios
18. A transaction that reduces the risk of an investment.
Basic accounting equation
Hedge
Performance budget
MV
19. [Total Revenues/ Total Assets]
Return on net assets
Accumulated depreciation
Program budget
Asset Turnover Ratio
20. 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.
Asset Management ratios
Average payment period
Comparative approach
Responsibility center
21. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Capital structure ratios
Coupon rate
Fixed (interest) rate debt
Collateral
22. 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.
Other support
Asset Management ratios
Long-term investments
Long Term Solvency ratios
23. Debt to be paid off in a period longer than one year.
Fixed costs
Long-term financing
Disbursement float
For-profit
24. Expenses that have been incurred - but not yet paid.
Liabilities
Non-current liabilities
Total revenue
Accrued expenses
25. 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.
Step-down method
Discounting
Tangible assets
Acid test ratio
26. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Amortization of a loan
Step Down
Accountability
Notes payable
27. An organization's financial obligations that are to be paid within one year.
Present value of an annuity
Mutually exclusive projects
Current liabilities
Expense budget
28. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Operating cash flows
Current assets
Opportunity cost
Average Days Inventory
29. An entity that owns other companies.
Contribution margin
Return on net assets
Parent organization
Performance budget
30. Revenues generated from an organization's operating activities.
Operating revenues
Contribution margin
Discounting
Liabilities
31. Responsibility centers responsible for making a certain return on investments.
Investment centers
Average Days Inventory
Base Budget
FV
32. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Asset Turnover Ratio
Cash and cash equivalents
Lease
Quick ratio
33. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Capital budget
Coupon
Income from investments
Ratio analysis
34. Capital investment decisions designed to increase an organization's strategic position.
FTE
Strategic decisions
Accrued expenses
Base Budget
35. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Statement of operations
Budget variance
Other expenses
Clinical cost centers
36. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Operating income
Donation
Effectiveness
Mail float
37. The revenue and expense budgets of an organization.
Revenue enhancement
Increase in unrestricted net assets
Operating budget
Net present value
38. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Final cost object
Revenue enhancement
Opportunity cost
Float
39. Proceeds lost by foregoing other opportunities.
Opportunity cost
Properties and equipment
Acid test ratio
Statement of operations
40. 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.
Coupon rate
Cash and cash equivalents
Tangible assets
Bad debt
41. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Net Assets to Total Assets
Compounding
Equity financing
Net present value
42. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.
Depreciation
Non-current liabilities
Current ratio
Performance budget
43. The ease and speed with which an asset can be turned into cash.
Days cash on hand
Net Assets
Liquidity
Collections policies and procedures
44. 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?
Cash flows from investing activities
Statement of cash flows
Average Days Inventory
Lease
45. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Financing mix
Acid test ratio
Compounding
Product diversity
46. The costs of a service after taking into account its direct and fair share of allocated costs.
Days cash on hand
Fully allocated costs
Coupon
Restricted donation
47. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Float
Income from investments
Lender
Excess of revenues over expenses
48. The rise in an economy's general level of prices.
Inflation
Restricted donation
Accounts receivable
Quick ratio
49. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Allocation
Bond rating
Properties and equipment - net
50. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Strategic financial planning
Spillover cash flows
Net assets to total assets
Times interest earned