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Test your basic knowledge |
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. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Common costs
Total asset turnover
Controlling activities
Intermediate Cost Object
2. 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
Investor
Cash flows from investing activities
Expense budget
Billing - collections - and disbursement policies and procedures
3. [Total assets/Net Assets]
FTE
Cash and cash equivalents
Performance measure
Leverage
4. The total amount of multiyear debt due in future years.
Intermediate Cost Object
Revenue enhancement
Capital appreciation
Long-term debt - net of current portion
5. [Net Accounts Receivable/(Revenue/356)]
Deferred revenues
Average Days Receivable
Mortgage bonds
Operating expenses
6. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Long-term financing
Capital budget
Annuity
Dividends
7. Full-time equivalent employees. Two half-time employees equal one FTE.
Capital investment decisions
Parent organization
Asset mix
FTE
8. A situation in which if one project is implemented the other(s) will not be.
Cash basis of accounting
Coupon payment
Statement of changes in net assets
Mutually exclusive projects
9. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Fully allocated costs
Excess of revenues over expenses
Capital budget
Effectiveness
10. The degree of dispersion of responsibility within an organization. See also Centralization.
Mutually exclusive projects
Times interest earned
Non-current assets
Decentralization
11. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.
Bonds
Line-item budget
Operating margin
Cash flows from operating activities
12. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Spillover cash flows
Lease
Base Budget
Lien
13. A transaction that reduces the risk of an investment.
Traditional profit centers
Hedge
Fixed supplies budget
Controlling activities
14. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Horizontal analysis
Collateral
Step Down
Activity Based Costing
15. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Expansion decisions
Top-down/bottom-up approach
Coupon rate
Beginning inventory
16. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Acid test ratio
IRR
Cash flows from financing activities
Bond rating agency
17. 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.
Fixed assets
Administrative profit centers
Present value of an annuity
Equity financing
18. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Periodic payments
Fixed labor budget
Transaction
Cash basis of accounting
19. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)
Realization principle
Program budget
Basis of Allocation
Activity ratios
20. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
G & A expenses
Cost centers
MV
Other support
21. 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
Statement of operations
Depreciation
Fixed asset turnover
Billing float
22. [(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
Indirect costs
Debt service coverage
Centralization
Long-term debt to net assets ratio
23. Revenues of the organization earned in non-healthcare related activities.
Investment grade
Multiyear budget
Non-operating revenues
Fixed (interest) rate debt
24. 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.
Allocation base
Expenses
Short-term financing
Present value of an annuity
25. The percentage of each asset relative to total assets.
SWOT analysis
Asset mix
Cash and cash equivalents
Short-term financing
26. 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.
Investment grade
Accrued expenses
Cash basis of accounting
Permanently restricted net assets
27. Series of payments over time - such as interest paid to bondholders.
Investor
Periodic payments
Expenses
Coupon payment
28. Responsibility centers responsible for making a certain return on investments.
Allocation
Program budget
Investment centers
Matching principle
29. 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.
Net present value
Ending inventory
Expense budget
Footnotes
30. 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.
Liquidity ratios
Net increase (decrease) in cash and cash equivalents
Compounding
Non-operating income
31. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Net assets released from restriction
Income from investments
Creditor
Fixed Asset Turnover
32. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Net working capital
Efficiency
Revenue budget
Final cost object
33. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Capital structure decision
Operating income
Fixed Asset Turnover
Times interest earned
34. 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.
Accumulated depreciation
Allocation
Fixed labor budget
Interest
35. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Parent organization
Notes payable
Capital appreciation
Liquidity ratios
36. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Cash flows from financing activities
Breakeven point
Operating expenses
Cost object
37. Budgets that typically cover two to five years.
Debt to equity
Multiyear budget
Operating margin
Expenses
38. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Strategic financial planning
Allocation
Horizontal analysis
Ending inventory
39. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Float
Loan amortization schedule
Net assets released from restriction
Activity Based Costing
40. The difference between current assets and current liabilities.
Times interest earned
Activity Based Costing
Parent organization
Net working capital
41. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Expenses
Effectiveness
Investor
Clinical cost centers
42. Recording expenses associated with making revenue at the same time as revenues are recognized
Matching principle
Top-down budgeting
Net present value
Creditor
43. Non-operating income.
Net Assets to Total Assets
Clinical cost centers
Other income
Effectiveness
44. The degree to which standards are met.
Effectiveness
Non-operating expenses
Expense budget
Leverage
45. Revenues generated from an organization's operating activities.
Administrative profit centers
Liabilities
Operating revenues
Tax-exempt bonds
46. 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.
Billing - collections - and disbursement policies and procedures
Revenue budget
Ending inventory
Cost of goods sold
47. How an organization chooses to finance its working capital needs.
Capital assets
Days cash on hand
Financing mix
Opening inventory
48. Expenses of the organization incurred in non-health-care related activities.
Increase in unrestricted net assets
Bond rating
Capital investment decisions
Non-operating expenses
49. 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.
Expenses
Lien
Liabilities
Net increase (decrease) in cash and cash equivalents
50. Service center costs are allocated to both mission centers and other service centers
Step Down
Responsibility center
Indirect costs
Depreciation