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Test your basic knowledge |
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
.
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. A security interest in one or more assets granted to lenders in a secured loan.
Retained earnings
Cost of capital
Lien
Expense cost variance
2. An entity that is owed money for lending funds or supplying goods or services on credit.
Creditor
Increase in unrestricted net assets
Indirect costs
Ending inventory
3. 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
Cash budget
Liabilities
Investment grade
4. Revenue is recorded when goods or services are delivered
Transaction
Allowance for uncollectibles
Investment grade
Realization principle
5. 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
Mail float
Properties and equipment - net
ABC
Budget variance
6. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Amortization of a loan
Mutually exclusive projects
Net assets released from restriction
Days cash on hand
7. 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.
Excess of revenues over expenses
Mortgage
Perpetuity
Revenue rate variance
8. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net increase (decrease) in cash and cash equivalents
Short-term financing
Operating income
Other expenses
9. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Matching principle
Mission statement
Contribution margin
Float
10. (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
Income from investments
Fixed costs
Tax-exempt bonds
Statement of operations
11. The elapsed time between financial statements. Common accounting periods
Opportunity cost
Accounts receivable
Accounting period
Long-term debt - net of current portion
12. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Liquidity ratios
Asset Management ratios
Expense cost variance
Debt service coverage
13. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Cash basis of accounting
Permanently restricted net assets
Allowance for uncollectibles
14. 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.
Line-item budget
Spillover cash flows
Single/Simple Step
Profitability ratios
15. 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.
Ending inventory
FTE
Decentralization
Coupon payment
16. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not
Not-for-profit
Total revenue
Long Term Solvency ratios
Permanently restricted net assets
17. What a series of equal payments in the future is worth today taking into account the time value of money.
Issuer
Times interest earned
Present value of an annuity
Expense cost variance
18. {current liabilities/[(total expenses
Horizontal analysis
Average payment period
Financing activities
Cash flows from investing activities
19. Gross proceeds less the underwriter's fee and other issuance fees.
Investment grade
Collateral
Net patient service revenue
Net proceeds from a bond issuance
20. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
ROI
Cost Accounting
Incremental cash flows
Issuer
21. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Increase in unrestricted net assets
Amortization of a loan
Financing activities
Current ratio
22. 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
Prepaid assets
Cash flows from investing activities
Transaction
23. The ease and speed with which an asset can be turned into cash.
Profitability ratios
Operating income
Strategic planning
Liquidity
24. Debt to be paid off in a period longer than one year.
Donation
Operating revenues
Long-term financing
Coupon rate
25. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Return on net assets
Donation
Multiyear budget
Non-current liabilities
26. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Other income
Investor
Current liabilities
Single/Simple Step
27. 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.
Line-item budget
Performance budget
Temporarily restricted net assets
Cash budget
28. Capital investment decisions designed to increase the operational capability of a health care organization.
Performance budget
Accounts payable
Realization principle
Expansion decisions
29. [Total assets/Net Assets]
Administrative cost centers
Leverage
Inflation
Notes payable
30. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Cash flows from financing activities
Parent organization
Long-term investments
Cash basis of accounting
31. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Incremental cash flows
Notes payable
Long-term debt - net of current portion
Collateral
32. Proceeds lost by foregoing other opportunities.
Opportunity cost
Operating cash flows
Loan amortization schedule
Balance sheet
33. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Certainty
Bad debt
For-profit
Permanently restricted net assets
34. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Base Budget
Capital structure ratios
Capital structure decision
Retained earnings
35. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Cash and cash equivalents
Responsibility center
Return on net assets
Expenses
36. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Allocation
Deferred revenues
Profit margin
Net assets to total assets
37. [Surplus/Operating Revenues]
Current assets
Allocation
Profit margin
Product diversity
38. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization
Beginning inventory
Discounting
Net present value
Times interest earned
39. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Periodic payments
Direct costs
Bond rating
Debt service coverage
40. The expenses incurred from an organization's operating activities.
Liquidity ratios
Tax-exempt bonds
Operating expenses
Current liabilities
41. [(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.
Coupon
Expenses
Expense cost variance
Lien
42. Responsibility centers responsible for making a certain return on investments.
Activity Based Costing
Billing float
Efficiency
Investment centers
43. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Creditor
Performance measure
Revenue budget
Activity Based Costing
44. 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
Co-payments
Donation
Other revenues
Statement of operations
45. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Creditor
Cash basis of accounting
FTE
Billing - collections - and disbursement policies and procedures
46. Being subject to sanctions with respect to carrying out responsibilities.
Spillover cash flows
Certainty
Accountability
FTE
47. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Quick ratio
Cash flows from investing activities
Investor
Other expenses
48. 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.
Cost of goods sold
Footnotes
Horizontal analysis
Effectiveness
49. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Non-operating income
Accrued expenses
Centralization
MV
50. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.
Cost of capital
Inflation
Clinical cost centers
Liabilities