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






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






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






4. Stated interest rate on a bond - as promised by the issuer.






5. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






6. [Total Liabilities/ Net assets]






7. Revenues of the organization earned in non-healthcare related activities.






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






9. 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.






10. The difference between what was planned (budgeted) and what was achieved (actual).






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






12. Responsibility centers responsible for making a certain return on investments.






13. Service center costs are allocated to both mission centers and other service centers






14. Price times total quantity.






15. Supplementing traditional sources of revenue with new sources.






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






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






18. 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.






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






20. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






21. process of measuring the resources (costs) used to produce results.






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






23. A security whose interest rate does not change during the lifetime of the bond.






24. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






26. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






27. The amount of time between when an organization receives a service and pays for it.






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






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






30. 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.






31. Expenses that have been incurred - but not yet paid.






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






33. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






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






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






36. The costs of a service after taking into account its direct and fair share of allocated costs.






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






38. 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.






39. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






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






41. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






42. 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.






43. (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;






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






45. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






46. Proceeds lost by foregoing other opportunities.






47. The expenses incurred from an organization's operating activities.






48. An entity that is owed money for lending funds or supplying goods or services on credit.






49. Amounts earned by the organization from the provision of service or sale of goods.






50. 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