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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. 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. 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).






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






4. Financing that will be paid back in less than one year.






5. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






6. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






7. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






8. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






9. Literally non-movable assets. Generally used to refer to buildings and equipment.






10. The activities of an organization directly related to its main line of business.






11. Properties and equipment less accumulated depreciation.






12. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






13. Assets = Liabilities + Net Assets (aka Equity).






14. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






16. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






18. [(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






19. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






20. 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.






21. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






22. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






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






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






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






27. [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?






28. Supplementing traditional sources of revenue with new sources.






29. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






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






31. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






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






33. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






34. An entity that is owed money for lending funds or supplying goods or services on credit.






35. Debt to be paid off in a period longer than one year.






36. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






37. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






38. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






39. 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.






40. The expenses incurred from an organization's operating activities.






41. How an organization chooses to finance its working capital needs.






42. The revenue and expense budgets of an organization.






43. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






44. 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.






45. [Total Revenues/ Total Assets]






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






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






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. Proceeds lost by foregoing other opportunities.






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