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






2. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






3. 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.






4. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






5. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






6. 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.






7. 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.






8. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






9. 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.






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






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






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






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






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






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






16. 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.






17. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






18. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






19. 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.






20. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






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






22. A situation in which if one project is implemented the other(s) will not be.






23. [(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






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






25. 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.






26. Revenues of the organization earned in non-healthcare related activities.






27. Financial obligations that will be paid off over a time period longer than one year






28. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






29. Supplementing traditional sources of revenue with new sources.






30. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






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






32. [Total Liabilities/ Net assets]






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






34. 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.






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






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






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






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






39. Gross proceeds less the underwriter's fee and other issuance fees.






40. An organization's financial obligations that are to be paid within one year.






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






42. process of measuring the resources (costs) used to produce results.






43. [Total Revenues/ Total Assets]






44. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






45. 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






46. 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.






47. 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).






48. 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.






49. An entity that gives capital to another entity in expectation of a financial or non-financial return.






50. The budget used to forecast operating expenses.