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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. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Cost centers
Liquidity ratios
HMO
Volume diversity
2. 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
Equity financing
Profit margin
Top-down budgeting
Accounts payable
3. 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.
Total revenue
Mutually exclusive projects
Book value
Cost avoidance
4. A transaction that reduces the risk of an investment.
Operating margin
Contribution margin
Matching principle
Hedge
5. 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
Cash flows from investing activities
Lien
Capital appreciation
Footnotes
6. Service center costs are allocated to both mission centers and other service centers
Cash and cash equivalents
Bond rating agency
Fixed asset turnover
Step Down
7. The difference between current assets and current liabilities.
Step Down
Net working capital
Properties and equipment - net
Other support
8. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Fixed labor budget
Net present value
SWOT analysis
Liquidity
9. The expenses incurred from an organization's operating activities.
Non-operating income
Operating expenses
Quick ratio
Capital assets
10. A good or service provided in return for some type of compensation.
Net accounts receivable
Operating budget
Long-term debt - net of current portion
Transaction
11. 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
Accountability
Common costs
Depreciation
Tangible assets
12. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.
IRR
Transaction
Times interest earned
Allocation base
13. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Long-term debt to net assets ratio
Net assets released from restriction
Mail float
Expense cost variance
14. The current traded rate for similar risk securities.
Certainty
Operating margin
Market rate of interest
Mission statement
15. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Capital investment decisions
Opportunity cost
Properties and equipment
Activity ratios
16. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Times interest earned
Asset Turnover Ratio
Discounting
Cash flows from financing activities
17. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Allocation base
Financing activities
Capital structure ratios
Debt to equity
18. Each service center
Compounding
Long-term debt to net assets ratio
Direct costs
Single/Simple Step
19. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Opening inventory
Billing - collections - and disbursement policies and procedures
Traditional profit centers
For-profit
20. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Disbursement float
Leverage
Co-payments
Cost centers
21. The cash flows derived from an organization's operating activities.
Equity financing
Book value
Operating cash flows
Cash equivalents
22. Highly liquid current assets such as interest-bearing savings and checking accounts.
Cash equivalents
Net assets to total assets
IRR
Net present value
23. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Controlling activities
Ending inventory
Book value
24. An investment that generates an annuity for an indefinite period of time - basically forever.
Revenue budget
ROI
Perpetuity
Base Budget
25. Full-time equivalent employees. Two half-time employees equal one FTE.
Temporarily restricted net assets
Notes payable
Revenue enhancement
FTE
26. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Operating income
Mortgage bonds
MV
Dividends
27. 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.
Non-operating revenues
Basis of Allocation
Cost
Mortgage bonds
28. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Net Assets
Donor
Donation
Parent organization
29. The revenue and expense budgets of an organization.
Collection float
Non-regular cash flows
Operating budget
Other support
30. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Notes payable
Step-down method
Accounts receivable
31. 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?
Financing activities
Other expenses
Statement of cash flows
Market rate of interest
32. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Compounding
Other expenses
Spillover cash flows
Revenue enhancement
33. Expenses that have been incurred - but not yet paid.
Product diversity
Strategic decisions
Accrued expenses
Payback
34. An assignment or grading of the likelihood that an organization will not default on a bond.
Prepaid assets
Periodic payments
Single/Simple Step
Bond rating
35. A security interest in one or more assets granted to lenders in a secured loan.
Comparative approach
Lien
Centralization
Co-payments
36. Series of payments over time - such as interest paid to bondholders.
Expense volume variance
Net increase (decrease) in cash and cash equivalents
Periodic payments
Financing mix
37. 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
FV
Operating cash flows
Days cash on hand
38. 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.
Income from investments
Non-regular cash flows
Coupon payment
Allowance for uncollectibles
39. 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.
Cash budget
Accumulated depreciation
Operating income
Current ratio
40. 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.
Balance sheet
Total revenue
Current ratio
Operating income
41. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.
Non-regular cash flows
Debt service coverage
Cost
Payback
42. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Capital structure ratios
Contribution margin
Accrual basis of accounting
Collection float
43. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Capital assets
Creditor
Periodic payments
Non-operating ratio
44. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Non-current liabilities
Basis of Allocation
Fixed asset turnover
Debt to equity
45. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.
Tax-exempt bonds
Parent organization
Responsibility center
Ratio analysis
46. The difference between what was planned (budgeted) and what was achieved (actual).
ABC
FTE
ROI
Budget variance
47. Revenues of the organization earned in non-healthcare related activities.
Fixed supplies budget
Administrative profit centers
Statement of operations
Non-operating revenues
48. The section of the expense budget that forecasts salary and benefits.
Coupon rate
Lien
Long-term financing
Fixed labor budget
49. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Incremental cash flows
Long-term debt - net of current portion
Centralization
Base Budget
50. 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.
Cash flows from operating activities
Revenue rate variance
Statement of changes in net assets
Responsibility center