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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
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. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Operating income
Statement of cash flows
Step Down
Compounding
2. 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.
Bad debt
Coupon payment
Non-operating revenues
Bond rating
3. 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.
Revenue budget
IRR
Accrual basis of accounting
Revenues
4. A note payable that has as collateral real assets and that requires periodic payments.
Fully allocated costs
Cash flows from financing activities
Strategic decisions
Mortgage
5. Supplementing traditional sources of revenue with new sources.
Capital
Revenue enhancement
Loan amortization schedule
Breakeven point
6. The revenue and expense budgets of an organization.
Operating budget
Cost
Book value
SWOT analysis
7. Highly liquid current assets such as interest-bearing savings and checking accounts.
Opening inventory
Revenue rate variance
Operating activities
Cash equivalents
8. The absence of risk in an investment.
Capital structure ratios
Operating cash flows
Mission statement
Certainty
9. A situation in which if one project is implemented the other(s) will not be.
Mutually exclusive projects
Cost
Return on net assets
Increase in unrestricted net assets
10. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Total revenue
Operating activities
Non-operating ratio
Cost of capital
11. Assets that have a physical presence.
Asset Turnover Ratio
Long-term debt - net of current portion
Quick ratio
Tangible assets
12. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Collection float
Traditional profit centers
Balance sheet
Net present value
13. [(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
Asset Turnover Ratio
Cost of goods sold
Collections policies and procedures
Expense volume variance
14. A security interest in one or more assets granted to lenders in a secured loan.
Total revenue
G & A expenses
Fixed (interest) rate debt
Lien
15. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Average Days Inventory
Restricted donation
Issuer
Quick ratio
16. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Fixed costs
Long Term Solvency ratios
Operating activities
Donation
17. 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
Effectiveness
Net Assets
Operating margin
Tangible assets
18. 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)
Single/Simple Step
Certainty
Basis of Allocation
Investment centers
19. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
ROI
Lien
Transaction
Temporarily restricted net assets
20. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Disbursement float
Realization principle
Book value
Accounts receivable
21. Portion of the profits the organization keeps in-house to use in support of its mission.
Retained earnings
Times interest earned
Common costs
Expense volume variance
22. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Operating activities
Collateral
Total asset turnover
Return on total assets
23. An entity that owns other companies.
Cash basis of accounting
Basis of Allocation
Non-operating revenues
Parent organization
24. Return on investment. The percentage gain or loss experienced from an investment.
Statement of operations
Parent organization
ROI
Donation
25. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Total asset turnover
G & A expenses
Accrual basis of accounting
Other income
26. Irregular cash flows - typically occurring at the end of the life of a project.
MV
Non-regular cash flows
Mortgage
Common costs
27. [Total Liabilities/ Net assets]
Debt to equity
Operating margin
Strategic decisions
Expenses
28. The ease and speed with which an asset can be turned into cash.
Non-operating expenses
Mail float
Cash basis of accounting
Liquidity
29. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Realization principle
Net present value
SWOT analysis
Step Down
30. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Present value of an annuity
Total revenue
Capital budget
Statement of operations
31. The section of the expense budget that forecasts salary and benefits.
Expense budget
Net proceeds from a bond issuance
Accounts payable
Fixed labor budget
32. Proceeds lost by foregoing other opportunities.
Cash basis of accounting
Liabilities
Opportunity cost
Issuer
33. The cash flows derived from an organization's operating activities.
Operating cash flows
Fixed (interest) rate debt
Strategic decisions
Prepaid assets
34. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor
Final cost object
ABC
Expenses
Total revenue
35. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.
Annuity
Bad debt
Revenue budget
Disbursement float
36. An entity that sells bonds in order to raise money.
Opening inventory
Debt to equity
Issuer
Capital appreciation
37. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Mortgage bonds
IRR
Periodic payments
G & A expenses
38. 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.
Cost object
Parent organization
Direct costs
Liabilities
39. An entity that is owed money for lending funds or supplying goods or services on credit.
Top-down budgeting
Mission Center
Allocation
Creditor
40. Financing used expressly for the purchase of non-current assets.
Mutually exclusive projects
Capital financing
Accounts payable
Allocation
41. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Cost Accounting
Line of credit
Strategic planning
Properties and equipment - net
42. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Other revenues
Cash flows from financing activities
Mission Center
Cost object
43. The percentage of each asset relative to total assets.
Mortgage bonds
Cost of goods sold
Acid test ratio
Asset mix
44. A good or service provided in return for some type of compensation.
Operating cash flows
Product diversity
Transaction
Cash flows from investing activities
45. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not
Basic accounting equation
Operating expenses
Revenue enhancement
Not-for-profit
46. An assignment or grading of the likelihood that an organization will not default on a bond.
Acid test ratio
Realization principle
Capital structure decision
Bond rating
47. Demonstrates the ability to pay off long term debt
Dividends
Long Term Solvency ratios
Billing float
Equity financing
48. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Long-term financing
Fully allocated costs
MV
Fixed Asset Turnover
49. [(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.
Strategic planning
Cost of goods sold
Expense cost variance
Fully allocated costs
50. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Lender
Intermediate Cost Object
Loan amortization schedule
Debt to equity