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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. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






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






3. An assignment or grading of the likelihood that an organization will not default on a bond.






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






5. 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.






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






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






8. [(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






9. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






10. 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.






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






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






13. 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






14. 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.






15. 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.






16. 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.






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






18. Previously restricted assets no longer restricted because the terms of the restriction have been met.






19. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






20. [Total Revenues/ Total Assets]






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






22. Return on investment. The percentage gain or loss experienced from an investment.






23. The rise in an economy's general level of prices.






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






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






26. 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.






27. The cash flows derived from an organization's operating activities.






28. A security interest in one or more assets granted to lenders in a secured loan.






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






30. 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.






31. 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.






32. Budgets that typically cover two to five years.






33. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






34. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






35. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






36. 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






37. A note payable that has as collateral real assets and that requires periodic payments.






38. Debt to be paid off in a period longer than one year.






39. 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.






40. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






41. 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






42. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






43. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






44. Financing used expressly for the purchase of non-current assets.






45. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






46. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






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






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






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






50. An entity that sells bonds in order to raise money.