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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. 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.






2. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






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






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






5. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






6. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






7. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






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






9. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






10. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






11. Stated interest rate on a bond - as promised by the issuer.






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






13. 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






14. 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.






15. The cost of activities that take place to produce the final cost object






16. [Total assets/Net Assets]






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






18. 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.






19. The costs of a service after taking into account its direct and fair share of allocated costs.






20. 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.






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






22. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






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






24. 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.






25. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






26. A note payable that has as collateral real assets and that requires periodic payments.






27. {current liabilities/[(total expenses






28. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






29. 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.






30. Series of payments over time - such as interest paid to bondholders.






31. Gross proceeds less the underwriter's fee and other issuance fees.






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






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






34. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






35. The elapsed time between financial statements. Common accounting periods






36. 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.






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






38. Portion of the profits the organization keeps in-house to use in support of its mission.






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






40. Supplementing traditional sources of revenue with new sources.






41. Demonstrates the ability to pay off long term debt






42. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






43. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






44. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






45. Revenues generated from an organization's operating activities.






46. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






48. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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






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