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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. [Total Liabilities/ Net assets]
Long-term debt - net of current portion
Lien
Debt to equity
Billing - collections - and disbursement policies and procedures
2. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Bad debt
Net patient service revenue
Decentralization
Cost avoidance
3. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Book value
Administrative profit centers
Mortgage
Allocation
4. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Float
Increase in unrestricted net assets
G & A expenses
Payback
5. Financing used expressly for the purchase of non-current assets.
Temporarily restricted net assets
Co-payments
Capital financing
Realization principle
6. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Service centers
Revenue rate variance
Profit margin
7. The elapsed time between financial statements. Common accounting periods
Cash flows from financing activities
Inflation
Accounting period
Accrued expenses
8. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Current assets
Expenses
Non-operating revenues
Activity Based Costing
9. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Properties and equipment - net
Operating margin
Service centers
Total asset turnover
10. Financial obligations that will be paid off over a time period longer than one year
Capital investment decisions
Responsibility center
Fixed costs
Non-current liabilities
11. [(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.
For-profit
Expense cost variance
Contribution margin
Net increase (decrease) in cash and cash equivalents
12. An assignment or grading of the likelihood that an organization will not default on a bond.
Fixed assets
Periodic payments
Traditional profit centers
Bond rating
13. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Traditional profit centers
Cash basis of accounting
Fixed asset turnover
Indirect costs
14. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Other expenses
Precautionary purposes
Net increase (decrease) in cash and cash equivalents
Contribution margin
15. The degree of dispersion of responsibility within an organization. See also Centralization.
Other income
Capital
Long-term financing
Decentralization
16. [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
Accountability
Collections policies and procedures
Excess of revenues over expenses
Long-term debt to net assets ratio
17. Recording expenses associated with making revenue at the same time as revenues are recognized
Other revenues
Fixed (interest) rate debt
Days cash on hand
Matching principle
18. 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.
Expense cost variance
Long-term investments
Investment grade
Billing float
19. Irregular cash flows - typically occurring at the end of the life of a project.
Operating income
Long-term financing
Strategic planning
Non-regular cash flows
20. The amount of time between when an organization receives a service and pays for it.
Disbursement float
Capital assets
Incremental cash flows
Decentralization
21. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization
Cash flows from financing activities
Net Assets
Final cost object
Ending inventory
22. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Step-down method
Temporarily restricted net assets
Interest
Cost object
23. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Coupon payment
Net Assets to Total Assets
Profit margin
Allowance for uncollectibles
24. process of measuring the resources (costs) used to produce results.
Net patient service revenue
Cost Accounting
Accountability
Spillover cash flows
25. Financing that will be paid back in less than one year.
Short-term financing
Beginning inventory
Final cost object
Mail float
26. What a series of equal payments in the future is worth today taking into account the time value of money.
Mail float
Present value of an annuity
Profitability ratios
Coupon
27. Demonstrates the ability to pay off long term debt
Net accounts receivable
Long Term Solvency ratios
Assets
Line of credit
28. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Discount rate
Long-term investments
Line of credit
Other income
29. 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
Activity ratios
Top-down budgeting
ABC
Cost avoidance
30. Proceeds lost by foregoing other opportunities.
Opportunity cost
Single/Simple Step
Compounding
Spillover cash flows
31. A situation in which if one project is implemented the other(s) will not be.
Mutually exclusive projects
Payback
Activity ratios
Excess of revenues over expenses
32. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Non-current assets
Donation
Compounding
Other income
33. [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).
Statement of cash flows
Traditional profit centers
Net assets to total assets
Periodic payments
34. [Net Accounts Receivable/(Revenue/356)]
Ratio analysis
Long-term investments
Average Days Receivable
Cost of goods sold
35. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Excess of revenues over expenses
Creditor
Payback
Deferred revenues
36. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Administrative profit centers
Average Days Receivable
Balance sheet
Co-payments
37. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Current liabilities
Cost of capital
Beginning inventory
38. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Cash budget
Asset Management ratios
Final cost object
Collection float
39. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Revenue rate variance
Donation
Multiyear budget
Non-operating ratio
40. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Financing activities
Coupon rate
Loan amortization schedule
Cost of capital
41. An entity that is owed money for lending funds or supplying goods or services on credit.
Allocation base
Transaction
Creditor
Capital assets
42. 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.
Increase in unrestricted net assets
Deferred revenues
Payback
Long-term debt to net assets ratio
43. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Billing float
Permanently restricted net assets
Activity ratios
Beginning inventory
44. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Precautionary purposes
Debt to equity
Administrative profit centers
Net assets released from restriction
45. Each service center
Financing activities
Fixed labor budget
Single/Simple Step
Spillover cash flows
46. The cost of the supplies on hand at the beginning of the year.
Opening inventory
Perpetuity
Periodic payments
Volume diversity
47. 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.
Revenue rate variance
Allowance for uncollectibles
Mortgage bonds
Capital assets
48. Non-operating income.
Incremental cash flows
Not-for-profit
Other income
Operating activities
49. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Current assets
Capital budget
For-profit
Cost of goods sold
50. Operating income not reported elsewhere under revenues - gains - and other support.
Base Budget
Allowance for uncollectibles
Performance budget
Other revenues