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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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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. Capital investment decisions designed to increase an organization's strategic position.
Strategic decisions
Donor
Performance measure
Fully allocated costs
2. The ease and speed with which an asset can be turned into cash.
SWOT analysis
Liquidity
Co-payments
Common costs
3. process of measuring the resources (costs) used to produce results.
Cost Accounting
Liquidity
Mail float
Interest
4. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Efficiency
Non-current liabilities
Issuer
Revenue rate variance
5. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Tax-exempt bonds
Disbursement float
Accounts receivable
Line-item budget
6. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Coupon payment
Mortgage bonds
Performance budget
Expenses
7. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Intermediate Cost Object
IRR
Non-current assets
Discounting
8. 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.
Budget
Mortgage
Strategic financial planning
Bad debt
9. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Profitability ratios
Non-operating ratio
Issuer
10. [(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
Fixed asset turnover
Periodic payments
Expense cost variance
Times interest earned
11. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Capital investment decisions
Spillover cash flows
Comparative approach
Statement of cash flows
12. The revenue and expense budgets of an organization.
Mission Center
Operating budget
Volume diversity
Accounts payable
13. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Administrative cost centers
Collections policies and procedures
Cost of capital
Indirect costs
14. Financing used expressly for the purchase of non-current assets.
Market rate of interest
Capital financing
Discounting
Long-term investments
15. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Investment grade
Accrued expenses
Operating income
Comparative approach
16. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Billing float
Liquidity ratios
Profit margin
Non-operating income
17. Revenue is recorded when goods or services are delivered
Activity ratios
Realization principle
Beginning inventory
Efficiency
18. 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.
Accrual basis of accounting
HMO
Total revenue
Traditional profit centers
19. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Present value of an annuity
Net accounts receivable
Non-operating ratio
Mortgage bonds
20. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.
Fixed costs
Ratio analysis
G & A expenses
Deferred revenues
21. 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.
Payback
Liquidity ratios
Coupon
Mutually exclusive projects
22. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Non-current assets
Equity financing
Allowance for uncollectibles
Compounding
23. 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.
Compounding
Multiyear budget
HMO
Average Days Inventory
24. An entity that sells bonds in order to raise money.
Activity Based Costing
Issuer
Responsibility center
Fully allocated costs
25. Highly liquid current assets such as interest-bearing savings and checking accounts.
Expansion decisions
Debt service coverage
Top-down/bottom-up approach
Cash equivalents
26. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Final cost object
Operating cash flows
Precautionary purposes
Step-down method
27. Return on investment. The percentage gain or loss experienced from an investment.
Fixed (interest) rate debt
ROI
Cash equivalents
Other expenses
28. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Step Down
Cash basis of accounting
Activity Based Costing
Lender
29. How an organization chooses to finance its working capital needs.
Fixed labor budget
Periodic payments
Top-down/bottom-up approach
Financing mix
30. 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
Amortization of a loan
Creditor
Asset Turnover Ratio
SWOT analysis
31. 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.
Capital assets
Precautionary purposes
Debt to equity
Effectiveness
32. 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.
Bad debt
Administrative profit centers
Collection float
Long-term debt to net assets ratio
33. What a series of equal payments in the future is worth today taking into account the time value of money.
Cash flows from financing activities
Co-payments
Present value of an annuity
Net patient service revenue
34. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Cash flows from financing activities
Accounts payable
Temporarily restricted net assets
35. 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
Retained earnings
Coupon rate
Not-for-profit
Cost of capital
36. The current traded rate for similar risk securities.
Time value of money
Market rate of interest
Excess of revenues over expenses
Expenses
37. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Incremental cash flows
Inflation
Current assets
Efficiency
38. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Restricted donation
Capital structure ratios
Top-down/bottom-up approach
Strategic planning
39. The percentage of each asset relative to total assets.
Asset mix
Bonds
Debt service coverage
Activity Based Costing
40. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Liquidity ratios
For-profit
Properties and equipment - net
Single/Simple Step
41. [Surplus/Operating Revenues]
Profit margin
Statement of changes in net assets
G & A expenses
Net working capital
42. Expenses that have been incurred - but not yet paid.
Accrued expenses
Donor
Line-item budget
Billing - collections - and disbursement policies and procedures
43. Full-time equivalent employees. Two half-time employees equal one FTE.
FTE
Co-payments
Statement of changes in net assets
Top-down/bottom-up approach
44. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Basic accounting equation
Debt service coverage
Not-for-profit
Asset Management ratios
45. Price times total quantity.
IRR
Total revenue
Breakeven point
Net patient service revenue
46. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Present value of an annuity
MV
Balance sheet
Statement of changes in net assets
47. Revenues of the organization earned in non-healthcare related activities.
Non-operating revenues
Collections policies and procedures
Accrued expenses
Direct costs
48. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Revenue rate variance
Donor
Investment grade
Capital investment decisions
49. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Temporarily restricted net assets
Loan amortization schedule
Issuer
Excess of revenues over expenses
50. Each service center
Accounts receivable
Strategic decisions
Net proceeds from a bond issuance
Single/Simple Step