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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
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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 of time between when an organization receives a service and pays for it.
Disbursement float
Activity ratios
Liabilities
Net assets released from restriction
2. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Cash flows from operating activities
Profit margin
Certainty
3. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Controlling activities
Cost avoidance
Coupon payment
Budget variance
4. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Fixed Asset Turnover
Expense cost variance
Operating budget
Net accounts receivable
5. [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?
Total revenue
Capital structure ratios
Total asset turnover
Bond rating agency
6. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Total asset turnover
Depreciation
Budget
Book value
7. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Spillover cash flows
Statement of operations
Excess of revenues over expenses
Fixed (interest) rate debt
8. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Product diversity
Ending inventory
Average Days Receivable
Coupon
9. 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.
Financing mix
Float
Investment centers
Compounding
10. Revenue is recorded when goods or services are delivered
Realization principle
Basic accounting equation
Mutually exclusive projects
Fixed labor budget
11. 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.
Expense budget
Mortgage
Line of credit
Opportunity cost
12. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Debt to equity
Tax-exempt bonds
Strategic planning
Efficiency
13. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Coupon payment
Operating margin
Cash and cash equivalents
Cash basis of accounting
14. Debt to be paid off in a period longer than one year.
Contribution margin
Effectiveness
Long-term financing
Float
15. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Allowance for uncollectibles
Certainty
Increase in unrestricted net assets
Average Days Receivable
16. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Leverage
Activity Based Costing
Performance measure
Net Assets to Total Assets
17. [Surplus/Operating Revenues]
Net assets released from restriction
Cash flows from operating activities
Net present value
Profit margin
18. {[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).
Prepaid assets
Days cash on hand
Long-term investments
Allowance for uncollectibles
19. process of measuring the resources (costs) used to produce results.
Mission statement
Quick ratio
Non-operating expenses
Cost Accounting
20. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Controlling activities
Capital assets
Accumulated depreciation
21. 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.
Total revenue
Billing float
Expense cost variance
Liabilities
22. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Allowance for uncollectibles
Fixed asset turnover
Ending inventory
Realization principle
23. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Mission Center
Non-operating revenues
Lender
Net assets released from restriction
24. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Long-term debt - net of current portion
Cost of goods sold
Product diversity
Beginning inventory
25. Amounts due to the organization from patients - third parties - and others.
Liquidity ratios
Accounts receivable
Fixed labor budget
Short-term financing
26. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Times interest earned
Present value of an annuity
Long-term debt to net assets ratio
Collateral
27. 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.
Accumulated depreciation
Mutually exclusive projects
Interest
Issuer
28. Supplementing traditional sources of revenue with new sources.
Investment grade
Clinical cost centers
Periodic payments
Revenue enhancement
29. 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.
Prepaid assets
Excess of revenues over expenses
Equity financing
Float
30. (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
Tax-exempt bonds
Lien
Return on total assets
Volume diversity
31. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Issuer
Quick ratio
Average Days Inventory
Net assets released from restriction
32. [(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
Precautionary purposes
Hedge
Debt service coverage
Net Assets to Total Assets
33. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he
HMO
Annuity
Activity ratios
Precautionary purposes
34. The costs of a service after taking into account its direct and fair share of allocated costs.
Beginning inventory
Fully allocated costs
Contribution margin
Liquidity
35. 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.
MV
Revenue rate variance
Temporarily restricted net assets
Operating budget
36. The difference between what was planned (budgeted) and what was achieved (actual).
Cash flows from investing activities
Balance sheet
Budget variance
Base Budget
37. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Comparative approach
Revenue budget
Coupon
Mortgage
38. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Bad debt
Centralization
Income from investments
Excess of revenues over expenses
39. A budget in which line items are presented by program.
Program budget
Loan amortization schedule
Donation
Non-current assets
40. 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.
Net present value
Temporarily restricted net assets
Discounted cash flows
Non-operating ratio
41. 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
Properties and equipment
Administrative profit centers
Loan amortization schedule
Coupon
42. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Budget variance
Excess of revenues over expenses
Mortgage bonds
Mission Center
43. 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.
Liabilities
Balance sheet
Revenue rate variance
Depreciation
44. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Debt to equity
Donor
Financing mix
Collections policies and procedures
45. An assignment or grading of the likelihood that an organization will not default on a bond.
Liabilities
Collection float
Bond rating
Contribution margin
46. Recording expenses associated with making revenue at the same time as revenues are recognized
Incremental cash flows
Net Assets to Total Assets
Matching principle
Coupon rate
47. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Quick ratio
Non-current assets
IRR
For-profit
48. 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.
Contribution margin
Inflation
Service centers
Properties and equipment - net
49. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Expense volume variance
Allocation
Donation
Long-term investments
50. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
G & A expenses
Incremental cash flows
SWOT analysis
Billing float