Test your basic knowledge |

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. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






2. Being subject to sanctions with respect to carrying out responsibilities.






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






4. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






5. The income (operating revenues -operating expenses) earned in non-health-care related activities.






6. Donated assets that have restrictions on their use which will never be removed.






7. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






8. The idea that a dollar today is worth more than a dollar in the future.






9. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






10. Directly related to the purposes of the organization and the delivery of services






11. Price times total quantity.






12. The elapsed time between financial statements. Common accounting periods






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






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






15. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






16. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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






18. The budget used to forecast operating expenses.






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






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






21. 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






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






23. 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






24. 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.






25. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






26. Proceeds lost by foregoing other opportunities.






27. 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.






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






29. A budget in which line items are presented by program.






30. 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.






31. An entity that gives capital to another entity in expectation of a financial or non-financial return.






32. 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.






33. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






34. The activities of an organization directly related to its main line of business.






35. 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.






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






37. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






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






39. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






40. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






41. 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.






42. 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






43. Each service center






44. {current liabilities/[(total expenses






45. 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






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






47. [Total Liabilities/ Net assets]






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






49. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






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