Test your basic knowledge |

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






2. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






4. The budget used to forecast operating expenses.






5. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






6. 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.






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






8. Supplementing traditional sources of revenue with new sources.






9. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






10. 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.






11. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






12. A situation in which if one project is implemented the other(s) will not be.






13. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






14. A transaction that reduces the risk of an investment.






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






16. 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.






17. (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;






18. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






19. The rise in an economy's general level of prices.






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






21. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






22. [Total Revenues/ Total Assets]






23. Price times total quantity.






24. 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)






25. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






26. 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






27. The absence of risk in an investment.






28. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






29. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






30. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






31. 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.






32. 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.






33. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






34. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






35. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






36. 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?






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






38. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






39. [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






40. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






42. 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.






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






44. The current traded rate for similar risk securities.






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






46. A good or service provided in return for some type of compensation.






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






48. 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.






49. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






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