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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
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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. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Loan amortization schedule
Final cost object
Operating margin
2. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Disbursement float
Operating income
Not-for-profit
Cash and cash equivalents
3. 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.
Discount rate
Bond rating
Expenses
Cost of goods sold
4. 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.
Product diversity
Permanently restricted net assets
Non-operating ratio
Fixed labor budget
5. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Allocation
Lease
Capital structure ratios
SWOT analysis
6. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Responsibility center
Permanently restricted net assets
Income from investments
Discounting
7. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Net present value
Responsibility center
Base Budget
Disbursement float
8. An entity that sells bonds in order to raise money.
Net patient service revenue
Cost of goods sold
Strategic decisions
Issuer
9. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Responsibility center
Lease
G & A expenses
Operating revenues
10. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
For-profit
Budget
Net Assets to Total Assets
Total revenue
11. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Intermediate Cost Object
Increase in unrestricted net assets
Net working capital
Accounting period
12. [Total Revenues/ Total Assets]
Parent organization
Asset Turnover Ratio
FTE
Collection float
13. The current traded rate for similar risk securities.
Line of credit
Tangible assets
Market rate of interest
Average Days Inventory
14. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.
Payback
Mortgage
Comparative approach
ABC
15. 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.
Bonds
Annuity
Accounts receivable
Final cost object
16. The revenue and expense budgets of an organization.
Billing float
Discounting
Fixed asset turnover
Operating budget
17. A security interest in one or more assets granted to lenders in a secured loan.
Volume diversity
Lien
Final cost object
Other support
18. Full-time equivalent employees. Two half-time employees equal one FTE.
Collection float
Net proceeds from a bond issuance
FTE
Amortization of a loan
19. An organization's financial obligations that are to be paid within one year.
Statement of cash flows
Current liabilities
Interest
Performance measure
20. The total amount of multiyear debt due in future years.
Operating cash flows
Long-term debt - net of current portion
Current ratio
Net assets released from restriction
21. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor
Cash flows from investing activities
Statement of changes in net assets
ABC
Net patient service revenue
22. 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.
Accumulated depreciation
Deferred revenues
Inflation
Billing float
23. Revenues of the organization earned in non-healthcare related activities.
Profitability ratios
Non-operating revenues
Retained earnings
Revenues
24. {current liabilities/[(total expenses
Average payment period
Return on net assets
Creditor
Interest
25. Properties and equipment less accumulated depreciation.
Operating income
Accrued expenses
Discount rate
Properties and equipment - net
26. Series of payments over time - such as interest paid to bondholders.
Non-operating expenses
Periodic payments
Return on net assets
Comparative approach
27. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Investor
Long-term financing
Indirect costs
Income from investments
28. [Total Liabilities/ Net assets]
Debt to equity
Net present value
Strategic decisions
Non-operating expenses
29. (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
Net proceeds from a bond issuance
Top-down/bottom-up approach
Tax-exempt bonds
For-profit
30. [(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
Budget variance
Net proceeds from a bond issuance
Expense volume variance
Activity ratios
31. Assets = Liabilities + Net Assets (aka Equity).
Present value of an annuity
Statement of operations
Basic accounting equation
Expansion decisions
32. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Line of credit
Deferred revenues
Clinical cost centers
Budget
33. 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.
Operating revenues
IRR
Efficiency
Average payment period
34. 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.
Float
Liquidity ratios
Long-term investments
Net accounts receivable
35. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Non-operating expenses
Time value of money
Cash flows from financing activities
36. Amounts earned by the organization from the provision of service or sale of goods.
Cash budget
Revenues
Fixed Asset Turnover
Current ratio
37. The elapsed time between financial statements. Common accounting periods
Accounting period
Cash flows from investing activities
For-profit
Other income
38. Responsibility centers responsible for making a certain return on investments.
Asset Management ratios
Investment centers
Cash budget
Multiyear budget
39. 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.
Deferred revenues
Final cost object
ROI
Cash and cash equivalents
40. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Debt service coverage
Profitability ratios
Net increase (decrease) in cash and cash equivalents
Return on net assets
41. [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?
Total asset turnover
Tangible assets
Single/Simple Step
Capital structure ratios
42. 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)
Accounts receivable
Net accounts receivable
Mission statement
Basis of Allocation
43. The cost of activities that take place to produce the final cost object
Budget
Horizontal analysis
Annuity
Intermediate Cost Object
44. What a series of equal payments in the future is worth today taking into account the time value of money.
Donor
Present value of an annuity
Loan amortization schedule
G & A expenses
45. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Revenue rate variance
Footnotes
Co-payments
Disbursement float
46. The cash flows derived from an organization's operating activities.
Capital budget
Permanently restricted net assets
Capital financing
Operating cash flows
47. The absence of risk in an investment.
Total asset turnover
Indirect costs
Certainty
Strategic financial planning
48. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Fixed Asset Turnover
Current assets
Non-operating ratio
Net increase (decrease) in cash and cash equivalents
49. The resources owned by the organization. It is one of the three major categories on the balance sheet.
For-profit
Assets
Annuity
Cash flows from investing activities
50. 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).
Breakeven point
Tax-exempt bonds
Periodic payments
Operating budget