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Test your basic knowledge |
ACCA Financial Management
Start Test
Study First
Subjects
:
certifications
,
business-skills
,
acca
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 idea that a dollar today is worth more than a dollar in the future.
Time value of money
Compounding
Long-term debt - net of current portion
Breakeven point
2. Assets that have a physical presence.
Equity financing
Tangible assets
Investment grade
Payback
3. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Bond rating agency
Revenue budget
Non-current liabilities
Times interest earned
4. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Debt to equity
Ratio analysis
Bad debt
Net present value
5. A security interest in one or more assets granted to lenders in a secured loan.
Lien
Co-payments
Strategic planning
Efficiency
6. 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
Net Assets to Total Assets
Retained earnings
Depreciation
Dividends
7. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Investor
For-profit
Program budget
Mortgage
8. [(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.
Expense cost variance
Accounting period
Market rate of interest
Other income
9. The ease and speed with which an asset can be turned into cash.
Liquidity
Statement of changes in net assets
Traditional profit centers
IRR
10. Literally non-movable assets. Generally used to refer to buildings and equipment.
Cost of capital
Acid test ratio
Fixed assets
Long-term debt - net of current portion
11. The elapsed time between financial statements. Common accounting periods
Prepaid assets
Other income
Retained earnings
Accounting period
12. 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.
Balance sheet
Properties and equipment
Responsibility center
Current liabilities
13. Irregular cash flows - typically occurring at the end of the life of a project.
Accrued expenses
Hedge
Current assets
Non-regular cash flows
14. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo
Long-term debt to net assets ratio
Market rate of interest
Non-current assets
Leverage
15. 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
Long-term financing
Top-down/bottom-up approach
Capital appreciation
Contribution margin
16. [Total Liabilities/ Net assets]
Liabilities
Debt to equity
Profitability ratios
Donor
17. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Non-operating income
ABC
Program budget
SWOT analysis
18. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Other expenses
Strategic decisions
Present value of an annuity
Activity ratios
19. 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
Clinical cost centers
HMO
ABC
Accountability
20. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Accountability
Investment centers
Net patient service revenue
Breakeven point
21. The cost of activities that take place to produce the final cost object
Debt to equity
Net present value
Intermediate Cost Object
Clinical cost centers
22. [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).
Net assets to total assets
Cash equivalents
Other income
Issuer
23. A situation in which if one project is implemented the other(s) will not be.
Present value of an annuity
Donation
Mutually exclusive projects
Current ratio
24. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.
Top-down budgeting
Discounted cash flows
Operating expenses
Capital investment decisions
25. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Budget variance
Permanently restricted net assets
Operating activities
Cost object
26. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income
Accounts receivable
Discounting
Step Down
Debt service coverage
27. A good or service provided in return for some type of compensation.
Transaction
Top-down/bottom-up approach
Strategic financial planning
Billing - collections - and disbursement policies and procedures
28. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
SWOT analysis
Breakeven point
Operating activities
Net Assets to Total Assets
29. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Collection float
Equity financing
Days cash on hand
Net accounts receivable
30. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and
Expense volume variance
Fixed asset turnover
ABC
Fixed labor budget
31. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Book value
Short-term financing
Operating income
Capital structure ratios
32. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Creditor
Step-down method
Deferred revenues
33. An entity that sells bonds in order to raise money.
Issuer
Mission statement
Expansion decisions
Amortization of a loan
34. [Inventory/ (Cost of Goods Sold/365)]
Co-payments
Cash flows from operating activities
Average Days Inventory
Current ratio
35. Gross proceeds less the underwriter's fee and other issuance fees.
Accumulated depreciation
Net proceeds from a bond issuance
Working capital
Operating margin
36. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Centralization
Responsibility center
Discounting
Book value
37. The current traded rate for similar risk securities.
Net present value
Market rate of interest
FTE
Product diversity
38. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Strategic planning
Spillover cash flows
Step-down method
Mission statement
39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Common costs
Lender
Payback
Cost of capital
40. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Asset mix
Strategic planning
Prepaid assets
Collection float
41. Service center costs are allocated to both mission centers and other service centers
Step Down
Allocation
Tangible assets
Allocation base
42. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Compounding
Expansion decisions
Cost centers
Operating activities
43. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Hedge
Average Days Inventory
Direct costs
Coupon payment
44. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Contribution margin
Non-operating ratio
Short-term financing
45. Series of payments over time - such as interest paid to bondholders.
Co-payments
Payback
Revenue rate variance
Periodic payments
46. The difference between what was planned (budgeted) and what was achieved (actual).
Net patient service revenue
Activity Based Costing
Strategic decisions
Budget variance
47. The cost of the supplies on hand at the beginning of the year.
Cost Accounting
ABC
Strategic planning
Opening inventory
48. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Asset Management ratios
Capital assets
Long-term investments
Fixed labor budget
49. Revenue is recorded when goods or services are delivered
FTE
Realization principle
Restricted donation
Notes payable
50. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.
Cost object
Billing float
Properties and equipment
Expense cost variance