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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. How an organization chooses to finance its working capital needs.
Capital
Long-term investments
Collateral
Financing mix
2. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Revenue rate variance
Allocation
Opening inventory
Restricted donation
3. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Return on net assets
Capital budget
Basis of Allocation
Cash basis of accounting
4. The budget used to forecast operating expenses.
Investor
Amortization of a loan
Expense budget
ABC
5. 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.
Capital structure decision
Ending inventory
Line-item budget
Capital budget
6. 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.
Bonds
Current assets
Service centers
Compounding
7. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Short-term financing
Clinical cost centers
Top-down/bottom-up approach
Discounted cash flows
8. Supplementing traditional sources of revenue with new sources.
Realization principle
Asset mix
Operating margin
Revenue enhancement
9. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Creditor
Periodic payments
Ending inventory
Capital appreciation
10. 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
Non-operating revenues
Fixed assets
Cash flows from investing activities
11. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Time value of money
Co-payments
Strategic planning
Discounted cash flows
12. A situation in which if one project is implemented the other(s) will not be.
Incremental cash flows
Asset mix
Product diversity
Mutually exclusive projects
13. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Profit margin
Accrued expenses
Top-down budgeting
Quick ratio
14. A transaction that reduces the risk of an investment.
Revenue rate variance
Hedge
Collection float
Mission Center
15. The changes in cash resulting from the normal operating activities of the organization.
Accounting period
Net accounts receivable
Quick ratio
Cash flows from operating activities
16. 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.
Donation
Budget variance
Collection float
Collateral
17. (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;
Capital structure decision
Long-term debt - net of current portion
Return on net assets
Cash flows from operating activities
18. 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
Top-down budgeting
Current ratio
Discount rate
Non-operating ratio
19. The rise in an economy's general level of prices.
Line of credit
Inflation
Fixed costs
Fixed assets
20. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Periodic payments
IRR
Acid test ratio
Spillover cash flows
21. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Interest
Net working capital
Accounting period
22. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Discount rate
Centralization
For-profit
23. Price times total quantity.
Total revenue
Excess of revenues over expenses
Top-down budgeting
Investor
24. 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)
Lease
Cost
Balance sheet
Basis of Allocation
25. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
IRR
Capital investment decisions
Net increase (decrease) in cash and cash equivalents
Coupon payment
26. 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
Budget variance
Properties and equipment
Capital assets
Investor
27. The absence of risk in an investment.
Income from investments
Certainty
Statement of operations
Prepaid assets
28. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.
Horizontal analysis
MV
Strategic financial planning
Cash and cash equivalents
29. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Properties and equipment - net
Operating expenses
Tangible assets
Temporarily restricted net assets
30. [(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
Certainty
Final cost object
Bond rating
Expense volume variance
31. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Revenue rate variance
Budget
Tax-exempt bonds
Lease
32. 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.
Cost of capital
Spillover cash flows
Allocation base
Centralization
33. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Bad debt
Mortgage bonds
Hedge
Mail float
34. 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.
Not-for-profit
Net patient service revenue
Discounted cash flows
Long-term debt - net of current portion
35. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Loan amortization schedule
Mortgage bonds
Performance budget
Fixed supplies budget
36. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?
Leverage
Cost Accounting
Capital structure ratios
Statement of cash flows
37. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Investment centers
FV
ABC
38. 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.
Cost avoidance
Net Assets to Total Assets
Creditor
Revenue enhancement
39. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo
Hedge
Long-term debt to net assets ratio
Discounting
HMO
40. 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.
Not-for-profit
Payback
Fixed costs
Tax-exempt bonds
41. The expenses incurred from an organization's operating activities.
G & A expenses
Basic accounting equation
Operating expenses
Short-term financing
42. 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.
Performance budget
Spillover cash flows
Beginning inventory
Budget
43. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Capital investment decisions
Strategic planning
Days cash on hand
Debt to equity
44. The current traded rate for similar risk securities.
Top-down/bottom-up approach
Market rate of interest
Issuer
Accountability
45. Expenses that have been incurred - but not yet paid.
Accrued expenses
Depreciation
Basic accounting equation
Fixed asset turnover
46. A good or service provided in return for some type of compensation.
Opening inventory
Transaction
Inflation
Operating income
47. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Cash flows from investing activities
Donor
Service centers
48. 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.
IRR
Financing activities
Accounts receivable
Investment grade
49. 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
Asset Management ratios
Loan amortization schedule
SWOT analysis
50. Ratios designed to answer the question: How profitable is the organization?
Profitability ratios
Net working capital
Profit margin
Budget