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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. 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.






2. The revenue and expense budgets of an organization.






3. The budget used to forecast operating expenses.






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






5. Properties and equipment less accumulated depreciation.






6. 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.






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






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






9. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






10. 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.






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






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. Demonstrates the ability to pay off long term debt






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






15. The idea that a dollar today is worth more than a dollar in the future.






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






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






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






19. Revenues generated from an organization's operating activities.






20. A legal obligation to pay the holder of the note or lien.






21. 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.






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






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






24. 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.






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






26. The resources owned by the organization. It is one of the three major categories on the balance sheet.






27. 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.






28. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






29. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






30. 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.






31. 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.






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






33. 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.






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






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






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






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






38. Budgets that typically cover two to five years.






39. Financing used expressly for the purchase of non-current assets.






40. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






41. 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).






42. (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.






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






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






45. Return on investment. The percentage gain or loss experienced from an investment.






46. The absence of risk in an investment.






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






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






49. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






50. [Total Revenues/ Total Assets]