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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. 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.
Decentralization
Cash flows from operating activities
Billing float
Net patient service revenue
2. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Asset mix
Non-current assets
Temporarily restricted net assets
Base Budget
3. 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
Expense cost variance
Donor
Depreciation
ABC
4. The expenses incurred from an organization's operating activities.
Co-payments
Fixed (interest) rate debt
Operating expenses
Long Term Solvency ratios
5. 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
Compounding
Line of credit
Administrative profit centers
6. Private entity or individual who makes a donation
Donor
Capital structure decision
Float
Fully allocated costs
7. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Acid test ratio
Not-for-profit
Net increase (decrease) in cash and cash equivalents
Assets
8. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Book value
Accumulated depreciation
Investment centers
Cost centers
9. Recording expenses associated with making revenue at the same time as revenues are recognized
Collection float
Beginning inventory
Expense budget
Matching principle
10. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Incremental cash flows
Basic accounting equation
Performance budget
Ending inventory
11. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
HMO
Non-operating expenses
Step-down method
Other expenses
12. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Efficiency
Retained earnings
Billing - collections - and disbursement policies and procedures
SWOT analysis
13. The cash flows derived from an organization's operating activities.
Lender
Parent organization
Periodic payments
Operating cash flows
14. The percentage of each asset relative to total assets.
Working capital
Cost Accounting
Asset mix
Capital investment decisions
15. What a series of equal payments in the future is worth today taking into account the time value of money.
Perpetuity
Present value of an annuity
Comparative approach
Administrative cost centers
16. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Mortgage
Operating activities
Donor
17. [(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
Common costs
Times interest earned
Cash budget
Mission Center
18. Literally non-movable assets. Generally used to refer to buildings and equipment.
Leverage
Cost
Step Down
Fixed assets
19. 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.
Creditor
Asset mix
Net working capital
Allocation base
20. 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.
Compounding
Ratio analysis
Capital
Capital financing
21. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Non-operating ratio
Revenue budget
Equity financing
Notes payable
22. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Mission statement
Acid test ratio
Lender
Ratio analysis
23. A method by which the organization develops its strategies and budgets to meet future financial targets.
Strategic financial planning
Long-term debt to net assets ratio
Mail float
Cost centers
24. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Debt to equity
Administrative cost centers
Leverage
Net assets released from restriction
25. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor
Short-term financing
ABC
Ending inventory
Beginning inventory
26. The section of the expense budget that forecasts salary and benefits.
Accrued expenses
Revenue budget
Fixed labor budget
Days cash on hand
27. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.
Statement of changes in net assets
Annuity
Capital financing
Net Assets to Total Assets
28. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Other expenses
Discounting
Fixed supplies budget
Current ratio
29. 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.
Expense budget
Asset mix
Common costs
Bad debt
30. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
ROI
Annuity
Discounting
Operating cash flows
31. Amounts the organization is obligated to pay others - including suppliers and creditors.
Investment grade
Accounts payable
Net Assets to Total Assets
Mission Center
32. 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.
Intermediate Cost Object
Service centers
Spillover cash flows
Properties and equipment - net
33. Budgets that typically cover two to five years.
Bad debt
Multiyear budget
Notes payable
Administrative profit centers
34. The ease and speed with which an asset can be turned into cash.
Liquidity
Fixed asset turnover
Non-current assets
Non-operating income
35. 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
Final cost object
Properties and equipment
Excess of revenues over expenses
Cost
36. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Capital structure ratios
Acid test ratio
Direct costs
Non-operating income
37. An entity that owns other companies.
Parent organization
Budget
Hedge
Acid test ratio
38. Capital investment decisions designed to increase the operational capability of a health care organization.
Common costs
Expansion decisions
Properties and equipment
Mission Center
39. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
FTE
Amortization of a loan
Operating cash flows
Activity ratios
40. Financial and non-financial standards against which organizational performance is measured.
Net Assets
Performance measure
Issuer
Net assets to total assets
41. {current liabilities/[(total expenses
HMO
Cost Accounting
Operating budget
Average payment period
42. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Accrued expenses
Discounted cash flows
Net patient service revenue
Other expenses
43. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Long-term financing
Income from investments
Indirect costs
Administrative cost centers
44. [Net Accounts Receivable/(Revenue/356)]
G & A expenses
Average Days Receivable
Accrual basis of accounting
Breakeven point
45. Each service center
Single/Simple Step
Properties and equipment - net
IRR
Current liabilities
46. [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?
Current ratio
Total asset turnover
IRR
Cost avoidance
47. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization
Activity Based Costing
Restricted donation
Net Assets
Bad debt
48. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Clinical cost centers
Current ratio
Cost
Expansion decisions
49. 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.
Fixed labor budget
ROI
Long-term financing
Collections policies and procedures
50. Financial obligations that will be paid off over a time period longer than one year
Basic accounting equation
Allowance for uncollectibles
Compounding
Non-current liabilities