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. 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.






2. 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






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






4. Donated assets that have restrictions on their use which will never be removed.






5. [Total Revenues/ Total Assets]






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






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






8. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






9. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






10. Current assets. Net working capital equals current assets –current liabilities.






11. The degree to which standards are met.






12. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






13. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






15. Properties and equipment less accumulated depreciation.






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






17. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






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






19. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






20. An entity that owns other companies.






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






22. The amount of time between when an organization receives a service and pays for it.






23. [(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.






24. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






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






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






27. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






28. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






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






30. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






33. 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.






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






35. Revenue is recorded when goods or services are delivered






36. {current liabilities/[(total expenses






37. [Total assets/Net Assets]






38. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






39. 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.






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






41. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






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






43. 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.






44. 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.






45. 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).






46. The section of the expense budget that forecasts salary and benefits.






47. An organization's financial obligations that are to be paid within one year.






48. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






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






50. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.