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






2. Price times total quantity.






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






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






5. An entity that owns other companies.






6. Capital investment decisions designed to increase an organization's strategic position.






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






8. 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.






9. Revenue is recorded when goods or services are delivered






10. Full-time equivalent employees. Two half-time employees equal one FTE.






11. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






12. 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.






13. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






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






15. Proceeds lost by foregoing other opportunities.






16. The difference between what was planned (budgeted) and what was achieved (actual).






17. {[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).






18. The idea that a dollar today is worth more than a dollar in the future.






19. A good or service provided in return for some type of compensation.






20. A note payable that has as collateral real assets and that requires periodic payments.






21. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






23. 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.






24. 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.






25. The cash flows derived from an organization's operating activities.






26. A legal obligation to pay the holder of the note or lien.






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






28. Assets = Liabilities + Net Assets (aka Equity).






29. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






30. 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






31. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






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






33. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






34. 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.






35. The expenses incurred from an organization's operating activities.






36. The budget used to forecast operating expenses.






37. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






38. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






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






40. 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






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






42. Highly liquid current assets such as interest-bearing savings and checking accounts.






43. The degree to which standards are met.






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






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






46. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






47. Each service center






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






49. Being subject to sanctions with respect to carrying out responsibilities.






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