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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
.
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. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Accrued expenses
Investor
Statement of changes in net assets
Non-operating ratio
2. 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.
Step-down method
Service centers
Hedge
Realization principle
3. [(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
Discounting
Budget variance
Expense volume variance
Temporarily restricted net assets
4. Financial obligations that will be paid off over a time period longer than one year
Discounting
Non-current liabilities
Investor
Financing mix
5. A security interest in one or more assets granted to lenders in a secured loan.
Lien
Prepaid assets
Cost avoidance
Net Assets
6. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme
Other support
Activity Based Costing
Statement of operations
Cash flows from investing activities
7. 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.
Other expenses
Capital budget
Discount rate
Administrative cost centers
8. The degree of dispersion of responsibility within an organization. See also Centralization.
Quick ratio
Not-for-profit
Equity financing
Decentralization
9. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Tax-exempt bonds
Program budget
Cost avoidance
Cost
10. The cash flows derived from an organization's operating activities.
Budget variance
Operating cash flows
Profit margin
Asset mix
11. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Allocation
Tangible assets
Investor
Debt to equity
12. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Cash basis of accounting
Collateral
Traditional profit centers
Horizontal analysis
13. 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.
Collection float
Non-regular cash flows
Comparative approach
Bond rating agency
14. 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.
Allowance for uncollectibles
Long-term debt to net assets ratio
Non-regular cash flows
Current liabilities
15. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Product diversity
Performance measure
Cash flows from financing activities
Capital budget
16. A situation in which if one project is implemented the other(s) will not be.
Cost of goods sold
Cash equivalents
Investment grade
Mutually exclusive projects
17. Operating income not reported elsewhere under revenues - gains - and other support.
Capital financing
Fixed supplies budget
Other revenues
Current liabilities
18. 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
Contribution margin
Bad debt
Statement of changes in net assets
HMO
19. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Allocation base
Hedge
Current assets
Fixed supplies budget
20. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Net assets to total assets
Fully allocated costs
Average Days Receivable
Operating revenues
21. (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.
Return on total assets
Allocation
Non-regular cash flows
Comparative approach
22. The elapsed time between financial statements. Common accounting periods
Non-current liabilities
Accounting period
Long-term financing
Revenue enhancement
23. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Ending inventory
Cash flows from financing activities
Excess of revenues over expenses
Liquidity
24. 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.
Top-down/bottom-up approach
Expenses
Direct costs
Collections policies and procedures
25. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Statement of changes in net assets
Interest
Volume diversity
Decentralization
26. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Parent organization
Restricted donation
Average Days Inventory
Cash flows from financing activities
27. 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
Current assets
Debt service coverage
Net accounts receivable
Cash flows from investing activities
28. [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?
Total asset turnover
Spillover cash flows
Mission Center
Total revenue
29. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
MV
ROI
Asset mix
Fixed (interest) rate debt
30. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Balance sheet
Mortgage
FV
Non-operating income
31. Capital investment decisions designed to increase an organization's strategic position.
Net present value
Capital structure ratios
Single/Simple Step
Strategic decisions
32. 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.
MV
Base Budget
Temporarily restricted net assets
Discounted cash flows
33. 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
Long-term debt - net of current portion
Net Assets
Properties and equipment
Non-operating ratio
34. An investment that generates an annuity for an indefinite period of time - basically forever.
Activity Based Costing
Perpetuity
Excess of revenues over expenses
Non-operating income
35. Highly liquid current assets such as interest-bearing savings and checking accounts.
Line-item budget
Cash equivalents
Horizontal analysis
Expense cost variance
36. The percentage of each asset relative to total assets.
Asset mix
Program budget
Acid test ratio
Other expenses
37. Amounts the organization is obligated to pay others - including suppliers and creditors.
Profit margin
Net Assets to Total Assets
Accounts payable
Fixed assets
38. [(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
Fixed costs
Times interest earned
Net working capital
Lien
39. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Capital investment decisions
Traditional profit centers
Coupon rate
Capital financing
40. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Restricted donation
Fixed assets
Donation
Cost
41. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Non-operating revenues
FTE
Intermediate Cost Object
42. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Top-down budgeting
Clinical cost centers
Equity financing
Mail float
43. Responsibility centers responsible for making a certain return on investments.
Disbursement float
Administrative profit centers
Investment centers
Operating budget
44. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Strategic planning
Float
Program budget
Non-current assets
45. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Net working capital
G & A expenses
Capital structure ratios
Assets
46. (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;
Return on net assets
Cash equivalents
Perpetuity
Annuity
47. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Coupon payment
Administrative cost centers
Accrued expenses
Lender
48. Service center costs are allocated to both mission centers and other service centers
Step Down
Financing activities
Liquidity ratios
Inflation
49. Ratios designed to answer the question: How profitable is the organization?
Net assets to total assets
Long-term investments
MV
Profitability ratios
50. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Statement of operations
Revenue rate variance
Final cost object
FTE