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ACCA Financial Management

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. The costs of a service after taking into account its direct and fair share of allocated costs.






2. Expenses that have been incurred - but not yet paid.






3. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






4. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






5. The cost of the supplies on hand at the beginning of the year.






6. The elapsed time between financial statements. Common accounting periods






7. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






8. 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).






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






10. Recording expenses associated with making revenue at the same time as revenues are recognized






11. Revenues generated from an organization's operating activities.






12. Demonstrates the ability to pay off long term debt






13. [Surplus/Operating Revenues]






14. 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.






15. 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.






16. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






17. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






18. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






19. Revenues of the organization earned in non-healthcare related activities.






20. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






21. [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?






22. The budget used to forecast operating expenses.






23. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






24. 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.






25. An entity that sells bonds in order to raise money.






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






27. 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.






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






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






30. 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).






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






32. 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.






33. Private entity or individual who makes a donation






34. 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






35. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






36. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






37. 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.






38. Costs that are traced to a cost object. See also Indirect costs and Cost object.






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






40. 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






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






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






43. Return on investment. The percentage gain or loss experienced from an investment.






44. Revenue is recorded when goods or services are delivered






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






46. 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.






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






48. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






49. [Total assets/Net Assets]






50. A security interest in one or more assets granted to lenders in a secured loan.







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