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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 current traded rate for similar risk securities.






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






3. 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.






4. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






5. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






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






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






8. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






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






10. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






11. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






12. 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.






13. 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.






14. Assets that have a physical presence.






15. A transaction that reduces the risk of an investment.






16. The difference between current assets and current liabilities.






17. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






18. [(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






19. Supplementing traditional sources of revenue with new sources.






20. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






22. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






23. Private entity or individual who makes a donation






24. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






25. Operating income not reported elsewhere under revenues - gains - and other support.






26. (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;






27. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






28. Ratios designed to answer the question: How profitable is the organization?






29. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






30. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






31. Properties and equipment less accumulated depreciation.






32. The budget used to forecast operating expenses.






33. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






34. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






35. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






36. [(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






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






38. 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






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






40. [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?






41. Current assets. Net working capital equals current assets –current liabilities.






42. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






43. The degree of dispersion of responsibility within an organization. See also Centralization.






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






45. 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.






46. Capital investment decisions designed to increase an organization's strategic position.






47. 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.






48. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






49. How an organization chooses to finance its working capital needs.






50. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.