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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Breakeven point
Current assets
Efficiency
Top-down budgeting
2. Revenue is recorded when goods or services are delivered
Non-current liabilities
Realization principle
Allowance for uncollectibles
Net proceeds from a bond issuance
3. 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
Bond rating
Expenses
Other support
Properties and equipment
4. The changes in cash resulting from the normal operating activities of the organization.
Cash flows from operating activities
Comparative approach
ROI
Non-current liabilities
5. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.
Horizontal analysis
Payback
Allowance for uncollectibles
Traditional profit centers
6. Expenses of the organization incurred in non-health-care related activities.
Non-operating expenses
Capital appreciation
Total asset turnover
Operating cash flows
7. The expenses incurred from an organization's operating activities.
Opening inventory
Operating expenses
ABC
Fixed costs
8. 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.
Fixed assets
Balance sheet
Accumulated depreciation
Accounts payable
9. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Donation
Net present value
Other expenses
Accountability
10. A legal obligation to pay the holder of the note or lien.
Top-down/bottom-up approach
Fixed asset turnover
Notes payable
Traditional profit centers
11. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b
Contribution margin
Fixed costs
Expense budget
Other support
12. The rise in an economy's general level of prices.
Inflation
Parent organization
Present value of an annuity
Discounting
13. Gross proceeds less the underwriter's fee and other issuance fees.
Net proceeds from a bond issuance
Billing float
Non-operating ratio
Expense cost variance
14. [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.
Not-for-profit
Current ratio
Cost
Days cash on hand
15. Budgets that typically cover two to five years.
Interest
Book value
Decentralization
Multiyear budget
16. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Capital
Non-operating ratio
Mission Center
Cost of goods sold
17. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Coupon payment
Non-regular cash flows
Capital budget
Performance measure
18. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Line of credit
Co-payments
Interest
Non-operating ratio
19. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Line of credit
Bad debt
Capital
Operating cash flows
20. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Parent organization
Operating cash flows
Fixed asset turnover
Accounting period
21. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.
Clinical cost centers
Balance sheet
Issuer
Cost object
22. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Mortgage
Allowance for uncollectibles
Restricted donation
23. The increase in the value of an investment from the time it is purchased until the time it is sold.
For-profit
Capital appreciation
Capital investment decisions
Accounts receivable
24. The activities of an organization directly related to its main line of business.
Statement of operations
Periodic payments
Non-operating expenses
Operating activities
25. 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.
Budget
Revenue enhancement
Payback
Loan amortization schedule
26. 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.
Lease
Mortgage bonds
Final cost object
Operating revenues
27. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Assets
Depreciation
Financing activities
Tangible assets
28. 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
Matching principle
Mission Center
Statement of operations
Leverage
29. The budget used to forecast operating expenses.
Expense budget
Total revenue
Co-payments
Quick ratio
30. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Cost
Compounding
Expense cost variance
Accrual basis of accounting
31. Service center costs are allocated to both mission centers and other service centers
Step Down
Retained earnings
Non-operating revenues
Other expenses
32. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Fixed Asset Turnover
Return on total assets
Comparative approach
Lien
33. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Increase in unrestricted net assets
Step Down
For-profit
Collateral
34. The elapsed time between financial statements. Common accounting periods
Accounting period
Activity ratios
Periodic payments
Capital
35. The cost of activities that take place to produce the final cost object
Clinical cost centers
ROI
Cost avoidance
Intermediate Cost Object
36. The cash flows derived from an organization's operating activities.
Operating cash flows
Disbursement float
Lease
Ratio analysis
37. Responsibility centers responsible for making a certain return on investments.
Investment centers
Discount rate
Investor
Book value
38. [Total Liabilities/ Net assets]
Basic accounting equation
Capital investment decisions
Coupon payment
Debt to equity
39. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Capital investment decisions
Periodic payments
Properties and equipment
Line-item budget
40. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Time value of money
Assets
Final cost object
Contribution margin
41. [(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
Debt service coverage
Capital assets
Notes payable
Working capital
42. The difference between what was planned (budgeted) and what was achieved (actual).
Budget variance
Cash basis of accounting
Current ratio
Controlling activities
43. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Assets
For-profit
Expenses
Coupon
44. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.
Temporarily restricted net assets
Collection float
Not-for-profit
Bonds
45. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Collections policies and procedures
Liquidity
Donor
Basic accounting equation
46. An entity that sells bonds in order to raise money.
Prepaid assets
Mortgage
Net Assets to Total Assets
Issuer
47. Revenues generated from an organization's operating activities.
Statement of cash flows
Operating revenues
Long-term investments
Capital structure ratios
48. [(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.
Expense cost variance
Traditional profit centers
Ending inventory
Realization principle
49. Recording expenses associated with making revenue at the same time as revenues are recognized
Billing float
Performance budget
Intermediate Cost Object
Matching principle
50. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Tax-exempt bonds
Liquidity ratios
Top-down/bottom-up approach
Cash basis of accounting