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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. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






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






4. A situation in which if one project is implemented the other(s) will not be.






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






6. 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.






7. 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.






8. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






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






11. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






12. [(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






13. (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






14. 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).






15. [(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.






16. 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.






17. {[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).






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






19. 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






20. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






21. Properties and equipment less accumulated depreciation.






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






23. The current traded rate for similar risk securities.






24. 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






25. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






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






27. 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.






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






29. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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






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






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






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






34. The rise in an economy's general level of prices.






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






36. The difference between current assets and current liabilities.






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






38. Non-operating income.






39. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






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






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






42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






43. Supplementing traditional sources of revenue with new sources.






44. 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.






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






46. 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.






47. An entity that owns other companies.






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






49. The income (operating revenues -operating expenses) earned in non-health-care related activities.






50. 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