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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. 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.






2. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






3. The amount of time between when an organization receives a service and pays for it.






4. [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).






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






6. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






7. The ease and speed with which an asset can be turned into cash.






8. 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?






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






10. [Total Revenues/ Total Assets]






11. [Surplus/Operating Revenues]






12. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






13. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






14. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






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. 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.






17. [Total Liabilities/ Net assets]






18. The degree of dispersion of responsibility within an organization. See also Centralization.






19. [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.






20. Debt to be paid off in a period longer than one year.






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






22. 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.






23. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






24. (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






25. Price times total quantity.






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






27. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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






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






30. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






31. 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






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






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






34. Financial and non-financial standards against which organizational performance is measured.






35. A certificate attached to a bond representing the amount of interest to be paid to the holder.






36. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






38. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






39. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






40. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






41. Financial obligations that will be paid off over a time period longer than one year






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






43. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






44. 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.






45. 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.






46. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






48. Operating income not reported elsewhere under revenues - gains - and other support.






49. Irregular cash flows - typically occurring at the end of the life of a project.






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