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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. 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.






2. 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.






3. Financial and non-financial standards against which organizational performance is measured.






4. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






5. The percentage of each asset relative to total assets.






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






7. 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.






8. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






9. The idea that a dollar today is worth more than a dollar in the future.






10. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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






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






13. The resources owned by the organization. It is one of the three major categories on the balance sheet.






14. Full-time equivalent employees. Two half-time employees equal one FTE.






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






16. Directly related to the purposes of the organization and the delivery of services






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






18. 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.






19. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






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






21. 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.






22. Private entity or individual who makes a donation






23. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






24. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






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






26. Expenses of the organization incurred in non-health-care related activities.






27. Ratios that measure how efficiently an organization is using its assets to produce revenues.






28. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






29. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






31. Supplementing traditional sources of revenue with new sources.






32. An investment that generates an annuity for an indefinite period of time - basically forever.






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






34. The section of the expense budget that forecasts salary and benefits.






35. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






36. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






37. {current liabilities/[(total expenses






38. The ease and speed with which an asset can be turned into cash.






39. The budget used to forecast operating expenses.






40. 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).






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






42. 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






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






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






45. Non-operating income.






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






47. 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.






48. Donated assets that have restrictions on their use which will never be removed.






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






50. The increase in the value of an investment from the time it is purchased until the time it is sold.