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






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






3. 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






4. Highly liquid current assets such as interest-bearing savings and checking accounts.






5. [(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






6. [Total Revenues/ Total Assets]






7. 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.






8. 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






9. [Net Accounts Receivable/(Revenue/356)]






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






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






12. The absence of risk in an investment.






13. 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.






14. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






15. What a series of equal payments in the future is worth today taking into account the time value of money.






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






17. 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.






18. {current liabilities/[(total expenses






19. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






21. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






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






23. 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.






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






25. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






26. A legal obligation to pay the holder of the note or lien.






27. 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






28. Capital investment decisions designed to increase the operational capability of a health care organization.






29. 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.






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. [Total Liabilities/ Net assets]






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






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






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






35. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






36. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






38. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






40. 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.






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






42. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






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






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






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






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






47. The degree to which standards are met.






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






49. 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






50. An entity that owns other companies.