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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. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






2. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






3. 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.






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






5. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






6. Service center costs are allocated to both mission centers and other service centers






7. The difference between current assets and current liabilities.






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






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






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






11. 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






12. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






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






14. The current traded rate for similar risk securities.






15. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






16. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






18. Each service center






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






20. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






21. The cash flows derived from an organization's operating activities.






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






23. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






24. An investment that generates an annuity for an indefinite period of time - basically forever.






25. Full-time equivalent employees. Two half-time employees equal one FTE.






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






27. 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.






28. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






29. The revenue and expense budgets of an organization.






30. [Inventory/ (Cost of Goods Sold/365)]






31. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






32. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






33. Expenses that have been incurred - but not yet paid.






34. An assignment or grading of the likelihood that an organization will not default on a bond.






35. A security interest in one or more assets granted to lenders in a secured loan.






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






37. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






38. 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.






39. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






40. 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.






41. 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.






42. 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.






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






44. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






45. 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.






46. The difference between what was planned (budgeted) and what was achieved (actual).






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






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






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






50. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.