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






2. The total amount of multiyear debt due in future years.






3. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






5. 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.






6. An entity that owns other companies.






7. 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.






8. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






9. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






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






12. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






13. 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.






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






15. 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.






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






17. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






18. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






19. 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.






20. [Total Liabilities/ Net assets]






21. 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






22. 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.






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






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






25. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






26. The degree to which standards are met.






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






28. Service center costs are allocated to both mission centers and other service centers






29. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






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






31. 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.






32. The section of the expense budget that forecasts salary and benefits.






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






34. 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.






35. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






36. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






37. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






38. 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.






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






40. A transaction that reduces the risk of an investment.






41. The absence of risk in an investment.






42. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






43. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






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






46. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






47. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






48. {current liabilities/[(total expenses






49. 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.






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