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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 budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






2. 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.






3. 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.






4. A method by which the organization develops its strategies and budgets to meet future financial targets.






5. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






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






7. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






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






9. 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.






10. Donated assets that have restrictions on their use which will never be removed.






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






12. 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.






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






14. 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.






15. [Surplus/Operating Revenues]






16. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






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






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






19. A security interest in one or more assets granted to lenders in a secured loan.






20. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






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






22. [(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






23. [Total Liabilities/ Net assets]






24. Responsibility centers responsible for making a certain return on investments.






25. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






26. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






27. 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.






28. 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






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






30. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






31. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






32. [Inventory/ (Cost of Goods Sold/365)]






33. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






34. The amount of supplies used to provide a service or good.






35. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






36. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






37. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






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






39. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






40. Portion of the profits the organization keeps in-house to use in support of its mission.






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






42. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






43. Current assets. Net working capital equals current assets –current liabilities.






44. The activities of an organization directly related to its main line of business.






45. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






46. Non-operating income.






47. 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.






48. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






49. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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