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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. Portion of the profits the organization keeps in-house to use in support of its mission.






2. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






4. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






5. The income (operating revenues -operating expenses) earned in non-health-care related activities.






6. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






7. The activities of an organization directly related to its main line of business.






8. 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.






9. 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.






10. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






11. 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.






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






13. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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






15. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






16. 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.






17. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






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






19. Supplementing traditional sources of revenue with new sources.






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






21. Directly related to the purposes of the organization and the delivery of services






22. [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.






23. Private entity or individual who makes a donation






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






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






26. Assets that have a physical presence.






27. 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.






28. The expenses incurred from an organization's operating activities.






29. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






31. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






32. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






33. 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.






34. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






35. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






36. Non-operating income.






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






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






39. The current traded rate for similar risk securities.






40. 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






41. Capital investment decisions designed to increase an organization's strategic position.






42. 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.






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






44. [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






45. 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.






46. Donated assets that have restrictions on their use which will never be removed.






47. 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.






48. 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.






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






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