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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
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certifications
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business-skills
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acca
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 method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
Step-down method
Cost of goods sold
Expenses
Accounting period
2. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Non-operating expenses
Cash flows from investing activities
Step-down method
Collateral
3. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Mutually exclusive projects
Current assets
Spillover cash flows
For-profit
4. A situation in which if one project is implemented the other(s) will not be.
Creditor
Mutually exclusive projects
Deferred revenues
Coupon rate
5. 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.
FV
Net assets released from restriction
Net working capital
Current liabilities
6. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Financing activities
Controlling activities
Cost object
Discounted cash flows
7. (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;
Notes payable
Return on net assets
Fixed costs
Financing activities
8. 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
Statement of operations
Creditor
Total asset turnover
Discounted cash flows
9. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Non-operating ratio
Net patient service revenue
Non-operating expenses
Quick ratio
10. Debt to be paid off in a period longer than one year.
Lien
Accumulated depreciation
Product diversity
Long-term financing
11. Directly related to the purposes of the organization and the delivery of services
Donation
Mission Center
ABC
Average Days Receivable
12. Literally non-movable assets. Generally used to refer to buildings and equipment.
Accrual basis of accounting
Expenses
Operating activities
Fixed assets
13. Non-operating income.
Beginning inventory
Other income
Working capital
Administrative profit centers
14. Return on investment. The percentage gain or loss experienced from an investment.
Cost of capital
ROI
Amortization of a loan
Revenues
15. A legal obligation to pay the holder of the note or lien.
Notes payable
Debt service coverage
Non-regular cash flows
Parent organization
16. Stated interest rate on a bond - as promised by the issuer.
Coupon rate
SWOT analysis
Fixed Asset Turnover
Balance sheet
17. 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.
Long-term financing
Increase in unrestricted net assets
Book value
Responsibility center
18. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Book value
Performance measure
Fixed (interest) rate debt
Amortization of a loan
19. 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.
Depreciation
Net Assets
Expansion decisions
Balance sheet
20. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.
Line of credit
Common costs
FV
Revenues
21. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Cash basis of accounting
Budget
Fixed costs
Investment grade
22. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Tangible assets
Other expenses
Net assets released from restriction
Loan amortization schedule
23. 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
Cash flows from investing activities
Opportunity cost
G & A expenses
Capital structure ratios
24. 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.
Capital structure decision
Cost avoidance
Performance measure
Capital assets
25. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Direct costs
Controlling activities
Current liabilities
26. 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.
Multiyear budget
Discount rate
Cost avoidance
Liabilities
27. 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?
Quick ratio
Hedge
ROI
Statement of cash flows
28. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Long-term investments
Mail float
Decentralization
29. [Inventory/ (Cost of Goods Sold/365)]
Donation
Capital appreciation
Average Days Inventory
Issuer
30. 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.
Cash and cash equivalents
Operating income
Billing - collections - and disbursement policies and procedures
Capital
31. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Parent organization
Administrative cost centers
Other expenses
Issuer
32. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Long-term debt - net of current portion
Working capital
Line of credit
Net Assets to Total Assets
33. 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.
Revenue enhancement
Product diversity
Fixed (interest) rate debt
Mission statement
34. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Collateral
Cost of goods sold
Final cost object
Allocation
35. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-regular cash flows
Debt service coverage
Non-current assets
Budget
36. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Expense volume variance
Volume diversity
Current liabilities
Non-operating income
37. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Deferred revenues
Acid test ratio
Beginning inventory
Fixed costs
38. 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.
Liabilities
Net Assets
Investment grade
Times interest earned
39. 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.
Accrued expenses
Coupon payment
Capital financing
Excess of revenues over expenses
40. [Total assets/Net Assets]
Capital budget
Leverage
Non-operating ratio
Bond rating
41. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Fixed Asset Turnover
Allocation base
Profit margin
Operating margin
42. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Administrative profit centers
Net increase (decrease) in cash and cash equivalents
Centralization
Profit margin
43. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Amortization of a loan
Net accounts receivable
Line of credit
Ratio analysis
44. Donated assets that have restrictions on their use which will never be removed.
Program budget
Issuer
Financing mix
Permanently restricted net assets
45. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Realization principle
Accountability
Fixed costs
46. The current traded rate for similar risk securities.
Market rate of interest
Non-current liabilities
Strategic financial planning
Incremental cash flows
47. 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.
Leverage
Loan amortization schedule
Financing mix
Cost avoidance
48. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Horizontal analysis
Balance sheet
Revenue budget
Tax-exempt bonds
49. [Total Liabilities/ Net assets]
Debt to equity
Other expenses
Fixed costs
FTE
50. Service center costs are allocated to both mission centers and other service centers
Step Down
Fixed Asset Turnover
Loan amortization schedule
Cash budget