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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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 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.






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






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






4. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






5. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






6. [Total Liabilities/ Net assets]






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






8. Non-operating income.






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






10. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






11. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






12. [Surplus/Operating Revenues]






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






14. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






15. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






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






18. 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.






19. The current traded rate for similar risk securities.






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






21. 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.






22. 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.






23. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






25. 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.






26. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






27. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






29. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






31. Operating income not reported elsewhere under revenues - gains - and other support.






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






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






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






35. 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






36. A certificate attached to a bond representing the amount of interest to be paid to the holder.






37. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






39. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






40. 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.






41. Private entity or individual who makes a donation






42. Ratios that measure how efficiently an organization is using its assets to produce revenues.






43. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






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






45. The income (operating revenues -operating expenses) earned in non-health-care related activities.






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






47. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






48. [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.






49. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






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






Can you answer 50 questions in 15 minutes?



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