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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. 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.
Line of credit
Average payment period
Operating budget
Coupon
2. process of measuring the resources (costs) used to produce results.
Bonds
Net patient service revenue
Asset Turnover Ratio
Cost Accounting
3. 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
Float
Accrual basis of accounting
Liquidity ratios
4. A transaction that reduces the risk of an investment.
Days cash on hand
Lender
Investment grade
Hedge
5. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Asset mix
SWOT analysis
Mutually exclusive projects
Expenses
6. The absence of risk in an investment.
Certainty
Current ratio
Traditional profit centers
Opportunity cost
7. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Total revenue
Activity Based Costing
Increase in unrestricted net assets
Capital assets
8. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Lease
Cost centers
Liquidity ratios
Co-payments
9. The amount of supplies used to provide a service or good.
Effectiveness
Cost of goods sold
Beginning inventory
Top-down/bottom-up approach
10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Revenues
Net increase (decrease) in cash and cash equivalents
Effectiveness
Dividends
11. [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
Administrative cost centers
Fixed costs
Market rate of interest
Long-term debt to net assets ratio
12. The revenue and expense budgets of an organization.
Operating revenues
Operating budget
Revenues
FV
13. Price times total quantity.
Book value
Total revenue
Budget
Net assets released from restriction
14. Directly related to the purposes of the organization and the delivery of services
Cash and cash equivalents
Collection float
Fixed costs
Mission Center
15. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Service centers
Cost centers
Precautionary purposes
Collection float
16. The cash flows derived from an organization's operating activities.
Average payment period
Spillover cash flows
Bond rating
Operating cash flows
17. Responsibility centers responsible for making a certain return on investments.
Periodic payments
Debt to equity
Creditor
Investment centers
18. 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.
Parent organization
Asset Turnover Ratio
Capital assets
Multiyear budget
19. Capital investment decisions designed to increase the operational capability of a health care organization.
Amortization of a loan
Operating income
Expansion decisions
Basic accounting equation
20. {current liabilities/[(total expenses
Realization principle
Revenue rate variance
Float
Average payment period
21. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Return on net assets
Inflation
Restricted donation
Other expenses
22. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.
Leverage
Allowance for uncollectibles
Loan amortization schedule
Strategic decisions
23. Supplementing traditional sources of revenue with new sources.
Revenue enhancement
Profit margin
Performance measure
Fixed (interest) rate debt
24. Revenues generated from an organization's operating activities.
Program budget
Product diversity
Operating revenues
Controlling activities
25. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Tangible assets
Basic accounting equation
Coupon rate
Return on net assets
26. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
G & A expenses
Net assets to total assets
Lender
Mortgage bonds
27. Literally non-movable assets. Generally used to refer to buildings and equipment.
Equity financing
Bad debt
Responsibility center
Fixed assets
28. The increase in the value of an investment from the time it is purchased until the time it is sold.
Capital appreciation
Billing float
Disbursement float
Operating budget
29. 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.
Net assets to total assets
Not-for-profit
Service centers
Budget
30. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Operating expenses
Times interest earned
Strategic planning
Spillover cash flows
31. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Leverage
Comparative approach
Bad debt
Administrative cost centers
32. An entity that is owed money for lending funds or supplying goods or services on credit.
Creditor
Lender
Budget
Other expenses
33. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Efficiency
Matching principle
Balance sheet
Base Budget
34. An organization's financial obligations that are to be paid within one year.
Current liabilities
Top-down/bottom-up approach
Cash budget
Investment grade
35. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Interest
Traditional profit centers
Asset Turnover Ratio
Allocation
36. Amounts earned by the organization from the provision of service or sale of goods.
Revenues
Income from investments
Revenue rate variance
Clinical cost centers
37. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Capital financing
G & A expenses
Net assets to total assets
Present value of an annuity
38. 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.
Ratio analysis
Perpetuity
Expansion decisions
Cost
39. An assignment or grading of the likelihood that an organization will not default on a bond.
Strategic decisions
Cash equivalents
Bond rating
Net Assets
40. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Accumulated depreciation
Capital assets
Financing activities
Cash flows from investing activities
41. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Liquidity ratios
Product diversity
Cost
Fixed assets
42. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Lender
Billing float
Amortization of a loan
MV
43. The difference between what was planned (budgeted) and what was achieved (actual).
Breakeven point
Annuity
Budget variance
Administrative profit centers
44. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Restricted donation
Present value of an annuity
Non-operating ratio
Budget
45. Stated interest rate on a bond - as promised by the issuer.
Allocation base
Decentralization
ROI
Coupon rate
46. Gross proceeds less the underwriter's fee and other issuance fees.
Capital structure decision
Mortgage
Net proceeds from a bond issuance
Liquidity
47. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Beginning inventory
FV
Revenue budget
Bonds
48. Portion of the profits the organization keeps in-house to use in support of its mission.
Debt service coverage
Net assets released from restriction
Retained earnings
FV
49. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Tangible assets
Efficiency
Certainty
Expense budget
50. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.
Operating revenues
Step Down
Collections policies and procedures
Current ratio