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Test your basic knowledge |
ACCA Financial Management
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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. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Collateral
Accumulated depreciation
Revenue budget
Financing mix
2. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Dividends
Liquidity ratios
Long-term debt - net of current portion
Realization principle
3. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b
Expense volume variance
Net present value
Bond rating
Contribution margin
4. The section of the expense budget that forecasts salary and benefits.
Net accounts receivable
Statement of changes in net assets
Performance measure
Fixed labor budget
5. [Net Accounts Receivable/(Revenue/356)]
Non-current assets
Average Days Receivable
Expansion decisions
Matching principle
6. A security interest in one or more assets granted to lenders in a secured loan.
Mutually exclusive projects
Lien
Discount rate
Allowance for uncollectibles
7. Directly related to the purposes of the organization and the delivery of services
Comparative approach
Mission Center
Ending inventory
Contribution margin
8. Literally non-movable assets. Generally used to refer to buildings and equipment.
Non-regular cash flows
Bond rating
Fixed assets
Other revenues
9. Full-time equivalent employees. Two half-time employees equal one FTE.
For-profit
FTE
Profit margin
Financing mix
10. Debt to be paid off in a period longer than one year.
Liabilities
Coupon rate
Long-term financing
Cash flows from operating activities
11. 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.
Line of credit
Step Down
Assets
Leverage
12. 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
Return on net assets
Net Assets
Volume diversity
Average payment period
13. Assets that have a physical presence.
Allocation
IRR
FTE
Tangible assets
14. 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.
Cost avoidance
Controlling activities
Operating margin
Income from investments
15. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Contribution margin
Base Budget
Discounting
16. The expenses incurred from an organization's operating activities.
Times interest earned
Restricted donation
Base Budget
Operating expenses
17. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Revenue budget
Service centers
Responsibility center
18. The costs of a service after taking into account its direct and fair share of allocated costs.
Fixed supplies budget
Fully allocated costs
Capital structure decision
Transaction
19. Non-operating income.
Expansion decisions
Performance measure
Current liabilities
Other income
20. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Debt service coverage
Other revenues
Equity financing
Breakeven point
21. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.
Loan amortization schedule
Final cost object
Precautionary purposes
Current ratio
22. 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
ABC
Certainty
Accounting period
Multiyear budget
23. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Centralization
Perpetuity
Loan amortization schedule
Beginning inventory
24. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Lease
Precautionary purposes
Long-term investments
Revenue enhancement
25. A good or service provided in return for some type of compensation.
Billing float
Transaction
Profitability ratios
Statement of cash flows
26. 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.
Line-item budget
Equity financing
Investor
Book value
27. 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.
Net assets released from restriction
Administrative profit centers
Balance sheet
Financing mix
28. 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.
Financing mix
Creditor
Asset Turnover Ratio
Product diversity
29. Financial and non-financial standards against which organizational performance is measured.
Cash flows from investing activities
Performance measure
Precautionary purposes
Fixed supplies budget
30. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Step-down method
Donation
Current ratio
Volume diversity
31. 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.
Program budget
Temporarily restricted net assets
Common costs
Net present value
32. 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.
Cash flows from investing activities
Expense cost variance
Administrative cost centers
Payback
33. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Cash basis of accounting
Expense cost variance
Bonds
Income from investments
34. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Time value of money
Cash flows from operating activities
Performance measure
Assets
35. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Debt service coverage
Non-current assets
Net Assets to Total Assets
Mail float
36. (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
Tax-exempt bonds
Interest
Excess of revenues over expenses
Fixed labor budget
37. Being subject to sanctions with respect to carrying out responsibilities.
Hedge
Accountability
Billing - collections - and disbursement policies and procedures
Capital financing
38. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Efficiency
Certainty
Capital financing
Non-operating ratio
39. 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.
Not-for-profit
Realization principle
Collections policies and procedures
Fixed (interest) rate debt
40. The cash flows derived from an organization's operating activities.
Clinical cost centers
Fixed costs
Operating cash flows
Co-payments
41. An entity that sells bonds in order to raise money.
Issuer
Ending inventory
Strategic financial planning
Collection float
42. Properties and equipment less accumulated depreciation.
Cash budget
Times interest earned
Intermediate Cost Object
Properties and equipment - net
43. 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.
Operating revenues
Long Term Solvency ratios
Discount rate
Properties and equipment
44. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Comparative approach
G & A expenses
Inflation
Long Term Solvency ratios
45. Proceeds lost by foregoing other opportunities.
Budget
Profit margin
Book value
Opportunity cost
46. The amount of time between when an organization receives a service and pays for it.
Current assets
Revenue enhancement
Allocation base
Disbursement float
47. A transaction that reduces the risk of an investment.
Depreciation
Permanently restricted net assets
Transaction
Hedge
48. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Non-current assets
Non-regular cash flows
Efficiency
Statement of changes in net assets
49. The degree to which standards are met.
Strategic planning
Common costs
Basic accounting equation
Effectiveness
50. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Donation
Capital structure ratios
Common costs
Transaction