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






2. 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.






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






4. Each service center






5. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






6. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






7. [Total assets/Net Assets]






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






9. 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.






10. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






11. The changes in cash resulting from the normal operating activities of the organization.






12. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






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






14. Financial obligations that will be paid off over a time period longer than one year






15. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






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






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






19. 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






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






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






22. 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.






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






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






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






26. Amounts the organization is obligated to pay others - including suppliers and creditors.






27. [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).






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






29. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






30. Budgets that typically cover two to five years.






31. A certificate attached to a bond representing the amount of interest to be paid to the holder.






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






33. 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.






34. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






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






36. Costs that are traced to a cost object. See also Indirect costs and Cost object.






37. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






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






40. The current traded rate for similar risk securities.






41. 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.






42. Amounts due to the organization from patients - third parties - and others.






43. 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.






44. 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.






45. 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.






46. The cost of the supplies on hand at the beginning of the year.






47. 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.






48. (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;






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






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