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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.
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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. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






2. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






3. Non-operating income.






4. 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.






5. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






7. 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?






8. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






11. Properties and equipment less accumulated depreciation.






12. The absence of risk in an investment.






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






14. Revenue is recorded when goods or services are delivered






15. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






16. [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.






17. Assets that have a physical presence.






18. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






19. A budget in which line items are presented by program.






20. 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.






21. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






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






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






24. 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.






25. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






26. 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.






27. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






28. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






30. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






31. A legal obligation to pay the holder of the note or lien.






32. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






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






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






35. Service center costs are allocated to both mission centers and other service centers






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






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






38. 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.






39. 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.






40. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






41. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






42. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






43. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






44. The total amount of multiyear debt due in future years.






45. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






46. The amount of time between when an organization receives a service and pays for it.






47. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






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






49. 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






50. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.







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