Test your basic knowledge |

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. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






2. 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).






3. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






5. The cost of activities that take place to produce the final cost object






6. The degree of dispersion of responsibility within an organization. See also Centralization.






7. 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.






8. The costs of a service after taking into account its direct and fair share of allocated costs.






9. [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.






10. The difference between what was planned (budgeted) and what was achieved (actual).






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






12. Revenue is recorded when goods or services are delivered






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. Amounts the organization is obligated to pay others - including suppliers and creditors.






15. 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.






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






17. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






18. Ratios that measure how efficiently an organization is using its assets to produce revenues.






19. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






20. 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.






21. A security interest in one or more assets granted to lenders in a secured loan.






22. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






23. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






24. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






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






26. 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






27. 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.






28. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






29. (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.






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






31. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






32. [Total assets/Net Assets]






33. (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;






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






35. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






36. An entity that gives capital to another entity in expectation of a financial or non-financial return.






37. Proceeds lost by foregoing other opportunities.






38. [Total Revenues/ Total Assets]






39. 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.






40. 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).






41. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






42. 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






43. 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.






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






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






46. [Surplus/Operating Revenues]






47. Financial and non-financial standards against which organizational performance is measured.






48. Costs that are traced to a cost object. See also Indirect costs and Cost object.






49. The revenue and expense budgets of an organization.






50. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.