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






2. 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.






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






4. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






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






6. Each service center






7. 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






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






9. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






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






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






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






14. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






15. The amount of supplies used to provide a service or good.






16. An organization's financial obligations that are to be paid within one year.






17. Return on investment. The percentage gain or loss experienced from an investment.






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






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






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






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






22. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






23. Budgets that typically cover two to five years.






24. 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.






25. 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






26. 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.






27. Being subject to sanctions with respect to carrying out responsibilities.






28. Demonstrates the ability to pay off long term debt






29. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






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






31. The revenue and expense budgets of an organization.






32. 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






33. Recording expenses associated with making revenue at the same time as revenues are recognized






34. 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.






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






36. Operating income not reported elsewhere under revenues - gains - and other support.






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






38. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






39. The difference between current assets and current liabilities.






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






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






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






43. 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.






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






45. Proceeds lost by foregoing other opportunities.






46. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






47. [Total Revenues/ Total Assets]






48. 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.






49. 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






50. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.