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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. 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.






2. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






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






4. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






5. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






6. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






7. (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;






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






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






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






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






12. Price times total quantity.






13. 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.






14. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






15. 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)






16. {current liabilities/[(total expenses






17. Financing that will be paid back in less than one year.






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






19. 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.






20. Each service center






21. 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






22. What a series of equal payments in the future is worth today taking into account the time value of money.






23. 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






24. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






25. 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






26. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






27. [Total Liabilities/ Net assets]






28. 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.






29. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






31. 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.






32. Stated interest rate on a bond - as promised by the issuer.






33. 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.






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






35. Recording expenses associated with making revenue at the same time as revenues are recognized






36. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






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






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






39. The absence of risk in an investment.






40. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






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






42. The difference between current assets and current liabilities.






43. 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.






44. 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.






45. The purchase of assets with contributed and internally generated funds. See also Debt financing.






46. 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






47. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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






49. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






50. 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.