Test your basic knowledge |

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. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






2. The current traded rate for similar risk securities.






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






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






5. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






6. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






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






8. [(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






9. 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






10. A security whose interest rate does not change during the lifetime of the bond.






11. A transaction that reduces the risk of an investment.






12. 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.






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






14. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






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






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






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






18. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






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






21. Each service center






22. Proceeds lost by foregoing other opportunities.






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






24. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






25. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






26. 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.






27. (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;






28. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






29. Demonstrates the ability to pay off long term debt






30. 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.






31. 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






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






33. Current assets. Net working capital equals current assets –current liabilities.






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






35. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






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






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






38. 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






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






40. Amounts earned by the organization from the provision of service or sale of goods.






41. [Total Liabilities/ Net assets]






42. 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.






43. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






44. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






45. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






46. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






47. 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.






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






49. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






50. Previously restricted assets no longer restricted because the terms of the restriction have been met.