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






2. Each service center






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






4. 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.






5. (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.






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






7. 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.






8. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






9. Gross proceeds less the underwriter's fee and other issuance fees.






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






11. A security whose interest rate does not change during the lifetime of the bond.






12. The cost of the supplies on hand at the beginning of the year.






13. Non-operating income.






14. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






15. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






16. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






18. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






19. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






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






21. A note payable that has as collateral real assets and that requires periodic payments.






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






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






24. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






25. The percentage of each asset relative to total assets.






26. (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






27. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






28. Assets that have a physical presence.






29. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






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






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






32. The current traded rate for similar risk securities.






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






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






35. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






37. 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).






38. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






39. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






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






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






42. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






43. [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).






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






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






46. Proceeds lost by foregoing other opportunities.






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






48. 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






49. An entity that is owed money for lending funds or supplying goods or services on credit.






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