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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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 budget in which line items are presented by program.






2. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






3. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






4. Non-operating income.






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






6. Literally non-movable assets. Generally used to refer to buildings and equipment.






7. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






8. 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.






9. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






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






12. (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.






13. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






14. [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?






15. Costs that are traced to a cost object. See also Indirect costs and Cost object.






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






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






18. Demonstrates the ability to pay off long term debt






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






20. The absence of risk in an investment.






21. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






23. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






24. [(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.






25. 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.






26. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






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






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






29. 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.






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






31. [Net Accounts Receivable/(Revenue/356)]






32. 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.






33. Budgets that typically cover two to five years.






34. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






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






36. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






37. The costs of a service after taking into account its direct and fair share of allocated costs.






38. [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).






39. Assets = Liabilities + Net Assets (aka Equity).






40. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






41. 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






42. Amounts the organization is obligated to pay others - including suppliers and creditors.






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






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






45. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






46. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.






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






48. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






49. (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;






50. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.







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