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






2. 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.






3. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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






5. Amounts due to the organization from patients - third parties - and others.






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






7. (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;






8. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






9. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






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






11. A transaction that reduces the risk of an investment.






12. 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






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






14. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






15. [Total Liabilities/ Net assets]






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






17. A method by which the organization develops its strategies and budgets to meet future financial targets.






18. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






19. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






20. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






22. The budget used to forecast operating expenses.






23. 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.






24. Assets = Liabilities + Net Assets (aka Equity).






25. Each service center






26. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






27. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






28. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






30. [Net Accounts Receivable/(Revenue/356)]






31. A good or service provided in return for some type of compensation.






32. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






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






34. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






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






37. The elapsed time between financial statements. Common accounting periods






38. [(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.






39. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






40. 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.






41. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






42. 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






43. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






44. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






45. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






46. An entity that owns other companies.






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






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






49. 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.






50. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.