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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. Responsibility centers responsible for making a certain return on investments.






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






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






4. 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.






5. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






6. Demonstrates the ability to pay off long term debt






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






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






9. An assignment or grading of the likelihood that an organization will not default on a bond.






10. 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.






11. [Surplus/Operating Revenues]






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






13. A note payable that has as collateral real assets and that requires periodic payments.






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






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






16. 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.






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






18. 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.






19. The budget used to forecast operating expenses.






20. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






21. How an organization chooses to finance its working capital needs.






22. The difference between current assets and current liabilities.






23. The activities of an organization directly related to its main line of business.






24. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






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






26. The current traded rate for similar risk securities.






27. The amount of supplies used to provide a service or good.






28. Stated interest rate on a bond - as promised by the issuer.






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






30. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






31. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






33. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






34. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






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






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






37. Budgets that typically cover two to five years.






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






39. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






40. Capital investment decisions designed to increase an organization's strategic position.






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






42. Each service center






43. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






44. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






45. [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.






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






47. 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.






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






49. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






50. The revenue and expense budgets of an organization.