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ACCA Financial Management

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






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






3. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






4. 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.






5. 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.






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






7. 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.






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






9. 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






10. Budgets that typically cover two to five years.






11. [Net Accounts Receivable/(Revenue/356)]






12. The difference between current assets and current liabilities.






13. [Inventory/ (Cost of Goods Sold/365)]






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






15. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






16. [Surplus/Operating Revenues]






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






18. [(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.






19. [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?






20. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






22. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






23. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






24. 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.






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






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






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






28. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






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






30. The changes in cash resulting from the normal operating activities of the organization.






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






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






33. 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






34. 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.






35. Demonstrates the ability to pay off long term debt






36. An entity that gives capital to another entity in expectation of a financial or non-financial return.






37. 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.






38. The revenue and expense budgets of an organization.






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






40. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






41. What a series of equal payments in the future is worth today taking into account the time value of money.






42. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






43. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






44. Price times total quantity.






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






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






47. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






48. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






49. 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.






50. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.