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Test your basic knowledge |
ACCA Financial Management
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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
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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. process of measuring the resources (costs) used to produce results.
Non-operating income
Cost Accounting
Billing float
Long-term financing
2. 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.
Responsibility center
Average Days Receivable
Step-down method
G & A expenses
3. 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.
Ratio analysis
Statement of changes in net assets
Parent organization
Horizontal analysis
4. 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
Cash flows from investing activities
Not-for-profit
Beginning inventory
Operating revenues
5. The rise in an economy's general level of prices.
Footnotes
Activity Based Costing
Inflation
MV
6. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Opening inventory
Opportunity cost
Asset Turnover Ratio
7. Revenue is recorded when goods or services are delivered
Operating revenues
Opportunity cost
HMO
Realization principle
8. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Profitability ratios
Billing float
Donation
Non-operating ratio
9. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Mutually exclusive projects
Footnotes
Current assets
10. The cost of the supplies on hand at the beginning of the year.
Profit margin
Contribution margin
Other income
Opening inventory
11. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Realization principle
Net patient service revenue
Budget
Non-current assets
12. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Capital structure decision
Other support
Cost
Current assets
13. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Average Days Inventory
FTE
Parent organization
14. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Disbursement float
Collections policies and procedures
Times interest earned
Clinical cost centers
15. An investment that generates an annuity for an indefinite period of time - basically forever.
Perpetuity
Inflation
Base Budget
Program budget
16. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Revenue budget
Time value of money
Operating expenses
17. The amount of supplies used to provide a service or good.
Cost of goods sold
Perpetuity
Asset mix
Total asset turnover
18. (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;
Creditor
Return on net assets
Statement of operations
Centralization
19. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
For-profit
Fixed assets
Financing mix
Product diversity
20. Expenses of the organization incurred in non-health-care related activities.
Non-operating expenses
Capital structure ratios
Working capital
Accounts receivable
21. Gross proceeds less the underwriter's fee and other issuance fees.
Other support
Net proceeds from a bond issuance
Accounting period
Mortgage
22. Proceeds lost by foregoing other opportunities.
Cash and cash equivalents
Long-term financing
Current liabilities
Opportunity cost
23. The difference between what was planned (budgeted) and what was achieved (actual).
Collateral
Accrual basis of accounting
Budget variance
Strategic decisions
24. Operating income not reported elsewhere under revenues - gains - and other support.
Cash flows from investing activities
Equity financing
Volume diversity
Other revenues
25. A transaction that reduces the risk of an investment.
Hedge
Mortgage bonds
IRR
Accrual basis of accounting
26. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Investment centers
Capital assets
Net Assets
Controlling activities
27. 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.
Times interest earned
Collection float
Average Days Receivable
Basis of Allocation
28. 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
Asset Management ratios
Net Assets
Hedge
Bond rating
29. A note payable that has as collateral real assets and that requires periodic payments.
Bad debt
Mortgage
Cost avoidance
Fixed Asset Turnover
30. Service center costs are allocated to both mission centers and other service centers
Basic accounting equation
Temporarily restricted net assets
Realization principle
Step Down
31. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Controlling activities
Efficiency
Donor
Allowance for uncollectibles
32. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Collections policies and procedures
Administrative cost centers
Inflation
Strategic planning
33. Being subject to sanctions with respect to carrying out responsibilities.
Investment grade
ABC
Mortgage
Accountability
34. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?
Average Days Inventory
Total asset turnover
MV
Time value of money
35. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Mission statement
Investment centers
Restricted donation
Current liabilities
36. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Investor
Strategic planning
Cash budget
Line of credit
37. The ease and speed with which an asset can be turned into cash.
Mission Center
Mortgage
Non-current liabilities
Liquidity
38. 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.
Coupon rate
Cash basis of accounting
Balance sheet
Fixed Asset Turnover
39. Amounts earned by the organization from the provision of service or sale of goods.
For-profit
Cost avoidance
Statement of cash flows
Revenues
40. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Collections policies and procedures
Liquidity
Net working capital
41. An organization's financial obligations that are to be paid within one year.
Current liabilities
Traditional profit centers
Financing mix
Contribution margin
42. Amounts due to the organization from patients - third parties - and others.
Accounts receivable
Intermediate Cost Object
Accountability
Top-down/bottom-up approach
43. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Net present value
Expense volume variance
Fixed Asset Turnover
Coupon payment
44. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Financing activities
Non-current assets
Mission Center
45. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Horizontal analysis
Income from investments
Accumulated depreciation
Centralization
46. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Financing mix
Prepaid assets
Assets
Allocation
47. An entity that is owed money for lending funds or supplying goods or services on credit.
Transaction
Creditor
Fixed labor budget
Multiyear budget
48. Expenses that have been incurred - but not yet paid.
Accrued expenses
Investment grade
Permanently restricted net assets
Fixed (interest) rate debt
49. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.
FV
Return on total assets
Deferred revenues
Parent organization
50. Each service center
Accrued expenses
Single/Simple Step
Acid test ratio
Accumulated depreciation