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Test your basic knowledge |
ACCA Financial Management
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Study First
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. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Lease
Mortgage bonds
ROI
Net present value
2. An entity that owns other companies.
Footnotes
Discounting
Capital structure decision
Parent organization
3. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Expansion decisions
Coupon
Payback
G & A expenses
4. Portion of the profits the organization keeps in-house to use in support of its mission.
Coupon rate
Revenues
Retained earnings
Performance measure
5. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Lender
ABC
Mortgage
Opening inventory
6. 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.
Co-payments
Ratio analysis
Book value
Performance measure
7. The revenue and expense budgets of an organization.
Mortgage bonds
Return on net assets
Operating budget
Expenses
8. The costs of a service after taking into account its direct and fair share of allocated costs.
Non-operating income
Coupon
Efficiency
Fully allocated costs
9. The difference between what was planned (budgeted) and what was achieved (actual).
Transaction
Budget variance
Statement of changes in net assets
Other support
10. 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.
Depreciation
Collection float
G & A expenses
Coupon payment
11. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Other support
Performance budget
Tax-exempt bonds
Long-term debt - net of current portion
12. 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
Profitability ratios
Incremental cash flows
Non-operating income
Amortization of a loan
13. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Other support
Footnotes
Profit margin
14. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Liabilities
Float
Top-down/bottom-up approach
Coupon
15. 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.
Short-term financing
Float
Net Assets
Current liabilities
16. The degree to which standards are met.
Controlling activities
Matching principle
Temporarily restricted net assets
Effectiveness
17. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Mutually exclusive projects
Expansion decisions
Cost object
Time value of money
18. [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
Collections policies and procedures
Long-term debt to net assets ratio
Float
Fixed (interest) rate debt
19. 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
ABC
Properties and equipment
FTE
Non-regular cash flows
20. 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.
Collections policies and procedures
Comparative approach
Beginning inventory
Direct costs
21. The cost of activities that take place to produce the final cost object
Other expenses
Intermediate Cost Object
Expense budget
Capital appreciation
22. Each service center
Single/Simple Step
Base Budget
Cost of goods sold
Expense budget
23. A security whose interest rate does not change during the lifetime of the bond.
Net accounts receivable
Quick ratio
Fixed (interest) rate debt
Base Budget
24. Proceeds lost by foregoing other opportunities.
Basic accounting equation
Donation
Acid test ratio
Opportunity cost
25. Assets that have a physical presence.
Fixed costs
Market rate of interest
Tangible assets
Expenses
26. 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
Cost avoidance
Fixed supplies budget
Intermediate Cost Object
Not-for-profit
27. A situation in which if one project is implemented the other(s) will not be.
Compounding
Accrued expenses
Mutually exclusive projects
FV
28. Highly liquid current assets such as interest-bearing savings and checking accounts.
Realization principle
Retained earnings
Total revenue
Cash equivalents
29. Return on investment. The percentage gain or loss experienced from an investment.
Cost of capital
Current ratio
Cost avoidance
ROI
30. A transaction that reduces the risk of an investment.
Bond rating
Hedge
Allocation
Centralization
31. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Return on total assets
Depreciation
Operating activities
Service centers
32. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Comparative approach
Fully allocated costs
Long-term debt - net of current portion
Quick ratio
33. [Net Accounts Receivable/(Revenue/356)]
Cost of goods sold
Average Days Receivable
Other income
IRR
34. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Statement of changes in net assets
Operating income
Statement of cash flows
Float
35. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Current assets
Investor
Administrative cost centers
Cost object
36. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Bad debt
Net increase (decrease) in cash and cash equivalents
Efficiency
Intermediate Cost Object
37. A note payable that has as collateral real assets and that requires periodic payments.
Mortgage
Operating income
Parent organization
Contribution margin
38. 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.
Interest
For-profit
Cash and cash equivalents
Basic accounting equation
39. An entity that is owed money for lending funds or supplying goods or services on credit.
Creditor
Market rate of interest
Lien
Allocation base
40. Revenues of the organization earned in non-healthcare related activities.
Non-operating revenues
Statement of changes in net assets
Accrued expenses
Market rate of interest
41. Amounts the organization is obligated to pay others - including suppliers and creditors.
Non-operating expenses
Accounts payable
Coupon rate
Cash budget
42. Literally non-movable assets. Generally used to refer to buildings and equipment.
Net accounts receivable
Fixed supplies budget
Fixed assets
Clinical cost centers
43. 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.
Long-term debt to net assets ratio
Operating cash flows
Accountability
Discount rate
44. A budget in which line items are presented by program.
Revenue budget
Line-item budget
Program budget
Transaction
45. 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.
Revenue rate variance
Average Days Receivable
Bonds
Line-item budget
46. An assignment or grading of the likelihood that an organization will not default on a bond.
Fixed asset turnover
Discounting
Bond rating
Discounted cash flows
47. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Compounding
Prepaid assets
Return on total assets
Capital investment decisions
48. 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.
Dividends
Single/Simple Step
Donor
Cash budget
49. The amount of supplies used to provide a service or good.
Cost of goods sold
Coupon rate
Working capital
Operating cash flows
50. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Expense budget
Debt to equity
Step Down
Days cash on hand