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






2. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






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






4. Ratios designed to answer the question: How profitable is the organization?






5. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






7. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






8. 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.






9. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






10. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






11. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






12. 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.






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






14. 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.






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






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






17. An assignment or grading of the likelihood that an organization will not default on a bond.






18. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






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






20. Supplementing traditional sources of revenue with new sources.






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






22. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






23. 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.






24. 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.






25. The current traded rate for similar risk securities.






26. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






27. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






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






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






30. [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).






31. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






33. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






35. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






36. 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






37. An organization's financial obligations that are to be paid within one year.






38. 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.






39. Proceeds lost by foregoing other opportunities.






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






41. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






42. [Total assets/Net Assets]






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






44. Assets that have a physical presence.






45. Recording expenses associated with making revenue at the same time as revenues are recognized






46. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






47. 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.






48. 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






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






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