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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. [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?






2. An organization's financial obligations that are to be paid within one year.






3. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






4. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






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






7. An entity that is owed money for lending funds or supplying goods or services on credit.






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






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






10. An entity that gives capital to another entity in expectation of a financial or non-financial return.






11. [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






12. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






13. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






14. The cash flows derived from an organization's operating activities.






15. 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.






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






17. Financing that will be paid back in less than one year.






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






19. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






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






21. 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.






22. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






23. 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.






24. A method by which the organization develops its strategies and budgets to meet future financial targets.






25. [(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.






26. 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).






27. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






28. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






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.






30. 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.






31. process of measuring the resources (costs) used to produce results.






32. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






34. The section of the expense budget that forecasts salary and benefits.






35. 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.






36. Financing used expressly for the purchase of non-current assets.






37. Ratios designed to answer the question: How profitable is the organization?






38. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






39. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






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






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






42. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






43. [Total Revenues/ Total Assets]






44. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






45. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






46. 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






47. Non-operating income.






48. Amounts earned by the organization from the provision of service or sale of goods.






49. 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.






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