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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. 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.






2. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






3. The changes in cash resulting from the normal operating activities of the organization.






4. How an organization chooses to finance its working capital needs.






5. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






6. Series of payments over time - such as interest paid to bondholders.






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






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






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






10. Non-operating income.






11. 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.






12. 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.






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






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






15. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






16. [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).






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






18. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






19. (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;






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






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






22. 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).






23. 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






24. 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.






25. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






26. (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.






27. Each service center






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






29. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






30. The degree to which standards are met.






31. Revenues of the organization earned in non-healthcare related activities.






32. Private entity or individual who makes a donation






33. The expenses incurred from an organization's operating activities.






34. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






35. Supplementing traditional sources of revenue with new sources.






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






37. 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






38. A budget in which line items are presented by program.






39. Proceeds lost by foregoing other opportunities.






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






41. Demonstrates the ability to pay off long term debt






42. 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






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






44. [Total Liabilities/ Net assets]






45. 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






46. 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






47. Highly liquid current assets such as interest-bearing savings and checking accounts.






48. 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.






49. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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