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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
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. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Bad debt
Accounts payable
Precautionary purposes
Line of credit
2. (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
Tax-exempt bonds
Operating income
Book value
Coupon payment
3. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Other expenses
Capital appreciation
Collections policies and procedures
Accrual basis of accounting
4. A legal obligation to pay the holder of the note or lien.
Notes payable
Permanently restricted net assets
Temporarily restricted net assets
Liabilities
5. The absence of risk in an investment.
Investor
Net present value
Accrued expenses
Certainty
6. Donated assets that have restrictions on their use which will never be removed.
Billing - collections - and disbursement policies and procedures
Leverage
Contribution margin
Permanently restricted net assets
7. Literally non-movable assets. Generally used to refer to buildings and equipment.
Bonds
Fixed assets
FV
Capital investment decisions
8. 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.
Excess of revenues over expenses
Cash flows from investing activities
Discount rate
Dividends
9. Assets that have a physical presence.
Amortization of a loan
Cost of capital
ROI
Tangible assets
10. Expenses of the organization incurred in non-health-care related activities.
Fully allocated costs
Bonds
Step-down method
Non-operating expenses
11. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and
Allocation
Expense volume variance
Tangible assets
Non-operating revenues
12. [Total Revenues/ Total Assets]
Decentralization
Debt to equity
Asset Turnover Ratio
Top-down budgeting
13. An entity that owns other companies.
Parent organization
Coupon
Performance measure
Step-down method
14. An assignment or grading of the likelihood that an organization will not default on a bond.
Beginning inventory
Bond rating
Certainty
Basic accounting equation
15. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Mortgage
Cost of capital
Current assets
Traditional profit centers
16. The ease and speed with which an asset can be turned into cash.
Compounding
Direct costs
Liquidity
Transaction
17. Private entity or individual who makes a donation
Basic accounting equation
Net proceeds from a bond issuance
Incremental cash flows
Donor
18. [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?
Mutually exclusive projects
Base Budget
IRR
Total asset turnover
19. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Mortgage bonds
Direct costs
Mission statement
SWOT analysis
20. Assets = Liabilities + Net Assets (aka Equity).
Capital appreciation
Basic accounting equation
Book value
Single/Simple Step
21. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Discount rate
Controlling activities
Disbursement float
Loan amortization schedule
22. 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
Net proceeds from a bond issuance
Long-term debt to net assets ratio
Assets
23. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Capital financing
Capital assets
Days cash on hand
Net assets to total assets
24. 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.
Lender
Top-down budgeting
Properties and equipment - net
Capital assets
25. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Discounting
Capital structure decision
Hedge
Footnotes
26. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Deferred revenues
Net accounts receivable
Effectiveness
Revenue budget
27. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Non-current assets
Net Assets
Spillover cash flows
Responsibility center
28. Financing used expressly for the purchase of non-current assets.
Capital financing
Cost of capital
Incremental cash flows
Liquidity
29. A budget in which line items are presented by program.
Average Days Inventory
Program budget
Clinical cost centers
Interest
30. 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
Fully allocated costs
Properties and equipment
Fixed supplies budget
ROI
31. The elapsed time between financial statements. Common accounting periods
Collections policies and procedures
Accounting period
Opening inventory
Asset mix
32. Revenues of the organization earned in non-healthcare related activities.
Accounting period
Non-operating revenues
Liquidity
Properties and equipment - net
33. An organization's financial obligations that are to be paid within one year.
Current liabilities
Payback
Donor
Cash equivalents
34. 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
Single/Simple Step
Non-operating ratio
Average payment period
35. Ratios designed to answer the question: How profitable is the organization?
Average payment period
Billing float
Profitability ratios
Net assets released from restriction
36. [(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.
Revenue budget
Coupon payment
Time value of money
Expense cost variance
37. {current liabilities/[(total expenses
Non-current liabilities
Average payment period
Cost of goods sold
Acid test ratio
38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Revenue rate variance
Average Days Inventory
Line-item budget
Liquidity ratios
39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Expense cost variance
Single/Simple Step
Return on net assets
Cost of capital
40. 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.
Cash basis of accounting
Indirect costs
For-profit
Product diversity
41. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Mortgage bonds
Cost centers
Billing float
Coupon payment
42. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.
Administrative profit centers
Compounding
Capital financing
ROI
43. The difference between current assets and current liabilities.
Strategic financial planning
Cash basis of accounting
Return on total assets
Net working capital
44. [Total Liabilities/ Net assets]
Line of credit
Fixed assets
Debt to equity
Retained earnings
45. The cash flows derived from an organization's operating activities.
Operating budget
Non-current liabilities
Operating cash flows
Base Budget
46. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.
Long-term investments
Bonds
Permanently restricted net assets
Allowance for uncollectibles
47. The degree to which standards are met.
Net patient service revenue
Effectiveness
Allowance for uncollectibles
Base Budget
48. Operating income not reported elsewhere under revenues - gains - and other support.
Other revenues
Debt to equity
Total asset turnover
Accumulated depreciation
49. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Restricted donation
Lender
Net Assets
Average Days Inventory
50. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Non-regular cash flows
Other support
Top-down/bottom-up approach
Quick ratio