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Test your basic knowledge |
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
.
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. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Efficiency
Cash basis of accounting
Coupon payment
Lender
2. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).
Deferred revenues
Expansion decisions
Coupon rate
Increase in unrestricted net assets
3. The elapsed time between financial statements. Common accounting periods
Notes payable
Tax-exempt bonds
Accounting period
Return on net assets
4. Financing that will be paid back in less than one year.
Cash basis of accounting
Accounts payable
Statement of changes in net assets
Short-term financing
5. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Current ratio
Depreciation
Net increase (decrease) in cash and cash equivalents
Capital budget
6. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Bond rating
Fixed (interest) rate debt
Net assets to total assets
Certainty
7. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Bond rating agency
Spillover cash flows
Responsibility center
Non-operating ratio
8. 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.
Cost object
Annuity
Allowance for uncollectibles
Other support
9. Literally non-movable assets. Generally used to refer to buildings and equipment.
Liquidity ratios
Other revenues
Fixed assets
Properties and equipment
10. The activities of an organization directly related to its main line of business.
Budget variance
Operating activities
Spillover cash flows
HMO
11. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Cost object
Net Assets to Total Assets
Coupon payment
12. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Cost object
Efficiency
Current ratio
Not-for-profit
13. Assets = Liabilities + Net Assets (aka Equity).
Performance budget
Discount rate
Basic accounting equation
Net increase (decrease) in cash and cash equivalents
14. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Fixed costs
Net present value
Program budget
15. Gross proceeds less the underwriter's fee and other issuance fees.
Collection float
Cost of goods sold
Revenue budget
Net proceeds from a bond issuance
16. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Retained earnings
Precautionary purposes
Investor
Coupon rate
17. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Operating income
Expense budget
Incremental cash flows
18. [(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
Capital financing
Debt service coverage
Market rate of interest
Properties and equipment - net
19. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Non-current liabilities
Breakeven point
Other revenues
G & A expenses
20. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Comparative approach
Accumulated depreciation
Net patient service revenue
Expense volume variance
21. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Lien
Expansion decisions
Capital investment decisions
Top-down/bottom-up approach
22. [(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.
Operating margin
Expense cost variance
Cash budget
Book value
23. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
SWOT analysis
Performance measure
Fixed (interest) rate debt
Traditional profit centers
24. Recording expenses associated with making revenue at the same time as revenues are recognized
Assets
Matching principle
Spillover cash flows
Cost avoidance
25. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Bad debt
Asset Management ratios
Acid test ratio
Expense budget
26. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Non-operating ratio
Line-item budget
Billing - collections - and disbursement policies and procedures
Prepaid assets
27. [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?
Precautionary purposes
Total asset turnover
Basic accounting equation
Performance budget
28. Supplementing traditional sources of revenue with new sources.
Step-down method
Long-term investments
Revenue enhancement
Cost Accounting
29. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Investor
Long Term Solvency ratios
Book value
30. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Lease
Strategic financial planning
Cost Accounting
Mortgage bonds
31. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Dividends
Product diversity
Total revenue
Net increase (decrease) in cash and cash equivalents
32. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Net present value
Non-current assets
Short-term financing
Strategic decisions
33. 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.
Opportunity cost
Statement of operations
Loan amortization schedule
Non-current liabilities
34. An entity that is owed money for lending funds or supplying goods or services on credit.
Liquidity ratios
Creditor
Capital budget
Opening inventory
35. Debt to be paid off in a period longer than one year.
Long-term financing
Centralization
Expenses
Cash and cash equivalents
36. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.
Revenue enhancement
Cash equivalents
Float
Current ratio
37. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Tangible assets
Book value
Return on net assets
Other income
38. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
Depreciation
Ratio analysis
Debt service coverage
Mutually exclusive projects
39. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.
Budget variance
Common costs
Retained earnings
Efficiency
40. The expenses incurred from an organization's operating activities.
Payback
Cost
Operating expenses
Net patient service revenue
41. How an organization chooses to finance its working capital needs.
Statement of changes in net assets
Fixed (interest) rate debt
Comparative approach
Financing mix
42. The revenue and expense budgets of an organization.
Expansion decisions
Responsibility center
Operating budget
Book value
43. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Other expenses
Average Days Inventory
HMO
Loan amortization schedule
44. 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 net assets
Service centers
Tax-exempt bonds
Notes payable
45. [Total Revenues/ Total Assets]
Hedge
Donation
Asset Turnover Ratio
Other expenses
46. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Income from investments
Donation
Capital investment decisions
Accrual basis of accounting
47. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Debt to equity
Capital structure ratios
Common costs
Contribution margin
48. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Line of credit
Return on net assets
Cash basis of accounting
Net proceeds from a bond issuance
49. Proceeds lost by foregoing other opportunities.
Opportunity cost
Dividends
Basic accounting equation
Working capital
50. The difference between what was planned (budgeted) and what was achieved (actual).
Collateral
Budget variance
Budget
Traditional profit centers