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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. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Breakeven point
Discounted cash flows
Asset Management ratios
Fixed Asset Turnover
2. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Statement of changes in net assets
Interest
Mortgage bonds
Depreciation
3. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Accounts receivable
Cost object
Volume diversity
Average payment period
4. Amounts the organization is obligated to pay others - including suppliers and creditors.
Precautionary purposes
Opportunity cost
Accounts payable
Clinical cost centers
5. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Current assets
Opportunity cost
Capital investment decisions
Comparative approach
6. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
MV
Coupon rate
Centralization
Deferred revenues
7. 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
Realization principle
Not-for-profit
Transaction
Cost Accounting
8. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Traditional profit centers
Hedge
Annuity
Capital budget
9. 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.
Non-regular cash flows
Liquidity ratios
Cash basis of accounting
Loan amortization schedule
10. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Donation
Service centers
Fully allocated costs
Assets
11. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Investment grade
Centralization
Fixed costs
Current ratio
12. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Discounting
Capital assets
Net assets to total assets
13. 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
Time value of money
Fixed supplies budget
Billing float
14. 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.
Volume diversity
Revenue budget
Ratio analysis
Capital structure decision
15. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.
Periodic payments
Statement of cash flows
Indirect costs
Balance sheet
16. [Net Accounts Receivable/(Revenue/356)]
Indirect costs
Cash budget
Average Days Receivable
Return on total assets
17. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Performance budget
Indirect costs
Times interest earned
Collection float
18. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Prepaid assets
Current assets
Operating expenses
Donation
19. Capital investment decisions designed to increase the operational capability of a health care organization.
Spillover cash flows
Revenue budget
Volume diversity
Expansion decisions
20. [(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
Debt service coverage
Capital appreciation
IRR
Operating income
21. Each service center
Float
Dividends
Single/Simple Step
Amortization of a loan
22. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Return on net assets
Income from investments
Line of credit
Cost of goods sold
23. Properties and equipment less accumulated depreciation.
Non-operating ratio
Properties and equipment - net
Loan amortization schedule
Volume diversity
24. The current traded rate for similar risk securities.
Mission statement
SWOT analysis
Multiyear budget
Market rate of interest
25. 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.
Cash flows from investing activities
Liquidity
Liabilities
Deferred revenues
26. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Intermediate Cost Object
Short-term financing
Restricted donation
Investment grade
27. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Asset Management ratios
Net assets released from restriction
Cost of goods sold
Revenue enhancement
28. An entity that is owed money for lending funds or supplying goods or services on credit.
Creditor
Beginning inventory
Operating margin
Base Budget
29. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Retained earnings
Total asset turnover
Capital investment decisions
Performance measure
30. 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.
Non-current assets
Capital budget
Cash budget
Allocation base
31. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Current assets
Lender
Net present value
Cash basis of accounting
32. {current liabilities/[(total expenses
Cash basis of accounting
Accounting period
Donation
Average payment period
33. 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.
Current liabilities
Contribution margin
Donor
Float
34. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Budget variance
Operating income
Discounting
Return on net assets
35. [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?
Perpetuity
Realization principle
Total asset turnover
Depreciation
36. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Discounted cash flows
Bad debt
Operating margin
Capital budget
37. 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.
Billing - collections - and disbursement policies and procedures
Average Days Inventory
Billing float
Time value of money
38. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Clinical cost centers
Operating expenses
Fixed labor budget
Capital appreciation
39. The difference between what was planned (budgeted) and what was achieved (actual).
Budget variance
Accountability
Parent organization
Balance sheet
40. 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.
Debt service coverage
Bonds
Average payment period
Non-regular cash flows
41. 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).
Retained earnings
Fixed supplies budget
Short-term financing
Spillover cash flows
42. Amounts due to the organization from patients - third parties - and others.
Accounts receivable
Common costs
For-profit
Retained earnings
43. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.
Cost of capital
Billing - collections - and disbursement policies and procedures
Return on total assets
Net working capital
44. 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.
Net accounts receivable
Cash and cash equivalents
Non-operating income
Deferred revenues
45. Current assets. Net working capital equals current assets –current liabilities.
Leverage
Mutually exclusive projects
Line-item budget
Working capital
46. Gross proceeds less the underwriter's fee and other issuance fees.
Capital financing
Net increase (decrease) in cash and cash equivalents
Interest
Net proceeds from a bond issuance
47. 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.
Income from investments
Long-term financing
Collection float
Footnotes
48. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Bond rating agency
Asset mix
Coupon
Liquidity
49. [Surplus/Operating Revenues]
Operating expenses
Profit margin
Working capital
Bad debt
50. Assets that have a physical presence.
Tangible assets
Beginning inventory
Fixed (interest) rate debt
Total asset turnover