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






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






3. 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.






4. [Surplus/Operating Revenues]






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






6. Properties and equipment less accumulated depreciation.






7. Amounts the organization is obligated to pay others - including suppliers and creditors.






8. 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.






9. 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.






10. 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.






11. An entity that owns other companies.






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






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






14. Full-time equivalent employees. Two half-time employees equal one FTE.






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






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






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






18. 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.






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






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






21. (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.






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






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






24. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






25. Private entity or individual who makes a donation






26. Each service center






27. Financial and non-financial standards against which organizational performance is measured.






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






29. Demonstrates the ability to pay off long term debt






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






31. [Total Revenues/ Total Assets]






32. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






33. Highly liquid current assets such as interest-bearing savings and checking accounts.






34. Irregular cash flows - typically occurring at the end of the life of a project.






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






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






37. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






39. The current traded rate for similar risk securities.






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






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






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






43. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






44. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






45. Budgets that typically cover two to five years.






46. 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.






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






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






49. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






50. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.