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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. Private entity or individual who makes a donation






2. (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






3. 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.






4. 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.






5. Full-time equivalent employees. Two half-time employees equal one FTE.






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






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






8. Supplementing traditional sources of revenue with new sources.






9. Debt to be paid off in a period longer than one year.






10. The increase in the value of an investment from the time it is purchased until the time it is sold.






11. Proceeds lost by foregoing other opportunities.






12. An organization's financial obligations that are to be paid within one year.






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






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






15. The revenue and expense budgets of an organization.






16. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






17. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






19. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






20. Irregular cash flows - typically occurring at the end of the life of a project.






21. The absence of risk in an investment.






22. A security whose interest rate does not change during the lifetime of the bond.






23. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






24. 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.






25. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






26. 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.






27. The expenses incurred from an organization's operating activities.






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






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






30. 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.






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






32. Current assets. Net working capital equals current assets current liabilities.






33. The current traded rate for similar risk securities.






34. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






35. 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.






36. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






37. 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).






38. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






40. Capital investment decisions designed to increase the operational capability of a health care organization.






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






42. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






43. 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.






44. Price times total quantity.






45. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






46. 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.






47. [(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






48. The elapsed time between financial statements. Common accounting periods






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






50. Return on investment. The percentage gain or loss experienced from an investment.