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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. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






2. 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.






3. Revenues generated from an organization's operating activities.






4. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






5. Responsibility centers responsible for making a certain return on investments.






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






7. Stated interest rate on a bond - as promised by the issuer.






8. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






9. 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.






10. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






11. [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).






12. 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.






13. 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






14. Previously restricted assets no longer restricted because the terms of the restriction have been met.






15. Financing used expressly for the purchase of non-current assets.






16. The income (operating revenues -operating expenses) earned in non-health-care related activities.






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






18. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






20. {current liabilities/[(total expenses






21. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






22. Literally non-movable assets. Generally used to refer to buildings and equipment.






23. 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.






24. 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.






25. Private entity or individual who makes a donation






26. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






27. Operating income not reported elsewhere under revenues - gains - and other support.






28. The absence of risk in an investment.






29. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






30. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






31. 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.






32. The cost of the supplies on hand at the beginning of the year.






33. A situation in which if one project is implemented the other(s) will not be.






34. The rise in an economy's general level of prices.






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






36. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






37. The total amount of multiyear debt due in future years.






38. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






39. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






40. The revenue and expense budgets of an organization.






41. 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.






42. Being subject to sanctions with respect to carrying out responsibilities.






43. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






44. 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.






45. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






46. 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.






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






48. Supplementing traditional sources of revenue with new sources.






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






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