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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. [Total Liabilities/ Net assets]






2. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






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






4. 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.






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






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






7. The elapsed time between financial statements. Common accounting periods






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






9. 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.






10. Financial obligations that will be paid off over a time period longer than one year






11. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






13. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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






15. The degree of dispersion of responsibility within an organization. See also Centralization.






16. [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






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






18. 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.






19. Irregular cash flows - typically occurring at the end of the life of a project.






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






21. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






22. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






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






24. process of measuring the resources (costs) used to produce results.






25. Financing that will be paid back in less than one year.






26. What a series of equal payments in the future is worth today taking into account the time value of money.






27. Demonstrates the ability to pay off long term debt






28. 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.






29. 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






30. Proceeds lost by foregoing other opportunities.






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






32. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






33. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






34. [Net Accounts Receivable/(Revenue/356)]






35. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






37. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






38. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






39. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






40. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






41. An entity that is owed money for lending funds or supplying goods or services on credit.






42. 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.






43. Ratios that measure how efficiently an organization is using its assets to produce revenues.






44. Previously restricted assets no longer restricted because the terms of the restriction have been met.






45. Each service center






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






47. 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.






48. Non-operating income.






49. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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