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ACCA Financial Management
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acca
Instructions:
Answer 50 questions in 15 minutes.
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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. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
IRR
Basic accounting equation
Income from investments
Permanently restricted net assets
2. Return on investment. The percentage gain or loss experienced from an investment.
ABC
ROI
Average Days Receivable
Current assets
3. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Realization principle
Other support
Total asset turnover
Fixed Asset Turnover
4. The degree of dispersion of responsibility within an organization. See also Centralization.
Cost of capital
Decentralization
Net accounts receivable
Non-current liabilities
5. 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?
Statement of cash flows
Other income
Comparative approach
Revenue budget
6. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Interest
Capital
Operating income
Net accounts receivable
7. [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.
Quick ratio
Cash equivalents
Current ratio
Investment centers
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.
Investment grade
Cash basis of accounting
Long Term Solvency ratios
Clinical cost centers
9. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Cash flows from operating activities
Line of credit
Income from investments
Capital financing
10. A situation in which if one project is implemented the other(s) will not be.
Retained earnings
Capital budget
Mutually exclusive projects
Expense volume variance
11. Assets = Liabilities + Net Assets (aka Equity).
Expense budget
Basic accounting equation
Liquidity ratios
Top-down budgeting
12. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Operating margin
Coupon
Fixed (interest) rate debt
Non-operating revenues
13. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Asset Management ratios
Line of credit
Capital investment decisions
14. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Retained earnings
Cash equivalents
Traditional profit centers
Cash flows from investing activities
15. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Income from investments
Operating income
Mission statement
Fully allocated costs
16. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Realization principle
Accrual basis of accounting
Allocation
ABC
17. The revenue and expense budgets of an organization.
Strategic financial planning
Non-current assets
Discount rate
Operating budget
18. 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.
Lease
Product diversity
Capital assets
Cost of goods sold
19. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Depreciation
Mortgage bonds
Cash basis of accounting
Cash flows from financing activities
20. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Mortgage bonds
Liquidity
Transaction
Mission Center
21. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Efficiency
Balance sheet
Financing activities
Cost object
22. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Fixed Asset Turnover
Annuity
Incremental cash flows
Other support
23. The amount of time between when an organization receives a service and pays for it.
Ratio analysis
Disbursement float
Mortgage bonds
Net assets to total assets
24. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.
Revenue rate variance
Service centers
Cash budget
Accounts payable
25. 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.
Expenses
Capital structure ratios
Allowance for uncollectibles
Beginning inventory
26. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization
Permanently restricted net assets
Days cash on hand
Coupon rate
Times interest earned
27. Being subject to sanctions with respect to carrying out responsibilities.
Permanently restricted net assets
Operating income
Mission Center
Accountability
28. [Total Liabilities/ Net assets]
Operating expenses
Line-item budget
Debt to equity
Net increase (decrease) in cash and cash equivalents
29. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Capital financing
FTE
Permanently restricted net assets
Liquidity ratios
30. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Comparative approach
Liabilities
Administrative cost centers
Temporarily restricted net assets
31. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Properties and equipment
Single/Simple Step
Net patient service revenue
Long Term Solvency ratios
32. Price times total quantity.
Properties and equipment
Inflation
Total revenue
Interest
33. A transaction that reduces the risk of an investment.
Capital financing
Perpetuity
Hedge
Asset mix
34. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Fixed costs
Revenue rate variance
Statement of operations
Non-current assets
35. The cash flows derived from an organization's operating activities.
Operating cash flows
Return on total assets
Average payment period
Coupon rate
36. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Excess of revenues over expenses
Base Budget
Intermediate Cost Object
Allowance for uncollectibles
37. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Liabilities
Fixed supplies budget
Statement of cash flows
Collateral
38. Financial obligations that will be paid off over a time period longer than one year
Non-current liabilities
Intermediate Cost Object
Net working capital
Cash flows from financing activities
39. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Average Days Receivable
Opportunity cost
Mission statement
Clinical cost centers
40. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Permanently restricted net assets
Fixed assets
Accounting period
41. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Footnotes
Net working capital
Periodic payments
42. Private entity or individual who makes a donation
Average payment period
Donor
Balance sheet
Product diversity
43. Amounts the organization is obligated to pay others - including suppliers and creditors.
Program budget
Short-term financing
Investor
Accounts payable
44. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Cost of capital
Restricted donation
Cash flows from investing activities
Book value
45. 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.
Balance sheet
Periodic payments
Billing - collections - and disbursement policies and procedures
Direct costs
46. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
IRR
Service centers
Strategic planning
Single/Simple Step
47. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Cost avoidance
Profitability ratios
Cost object
48. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Loan amortization schedule
IRR
Balance sheet
49. 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.
Investment grade
Cash and cash equivalents
Performance budget
Average Days Inventory
50. A method by which the organization develops its strategies and budgets to meet future financial targets.
Strategic financial planning
Capital structure decision
Direct costs
Certainty
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