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Test your basic knowledge |
ACCA Financial Management
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Study First
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
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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. 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.
Net proceeds from a bond issuance
Net increase (decrease) in cash and cash equivalents
Step-down method
ROI
2. The revenue and expense budgets of an organization.
Budget
Operating budget
Time value of money
Excess of revenues over expenses
3. Financing that will be paid back in less than one year.
Operating cash flows
Non-operating expenses
Short-term financing
Mortgage
4. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Cash flows from investing activities
Times interest earned
Incremental cash flows
Billing - collections - and disbursement policies and procedures
5. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Net working capital
FV
Top-down/bottom-up approach
Efficiency
6. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Operating cash flows
Revenue rate variance
Dividends
G & A expenses
7. 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.
Liquidity ratios
Cost object
Coupon payment
Certainty
8. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Net present value
SWOT analysis
Single/Simple Step
Balance sheet
9. [Total Revenues/ Total Assets]
Cash flows from operating activities
ABC
Mutually exclusive projects
Asset Turnover Ratio
10. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Mortgage
Profitability ratios
Volume diversity
11. 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.
Clinical cost centers
Centralization
Common costs
Average payment period
12. 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.
Capital budget
Capital structure decision
Coupon rate
Bonds
13. The activities of an organization directly related to its main line of business.
Operating activities
Strategic planning
Float
Breakeven point
14. 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
Contribution margin
Expansion decisions
Statement of operations
Cost Accounting
15. 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).
Permanently restricted net assets
Breakeven point
Net Assets
Balance sheet
16. 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
Revenue rate variance
Billing - collections - and disbursement policies and procedures
Multiyear budget
Depreciation
17. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Program budget
Net Assets to Total Assets
Amortization of a loan
Non-operating ratio
18. The elapsed time between financial statements. Common accounting periods
Operating margin
Accounting period
Accounts payable
Other expenses
19. [(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
Volume diversity
Debt service coverage
Fixed labor budget
Net present value
20. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Short-term financing
Inflation
Retained earnings
Other expenses
21. Revenue is recorded when goods or services are delivered
Periodic payments
Decentralization
Investment grade
Realization principle
22. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Accounting period
Bond rating agency
Prepaid assets
Strategic planning
23. The cost of the supplies on hand at the beginning of the year.
Average payment period
Depreciation
Expense volume variance
Opening inventory
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.
Working capital
Liabilities
Discounted cash flows
Temporarily restricted net assets
25. Capital investment decisions designed to increase an organization's strategic position.
ABC
Net Assets
Liquidity ratios
Strategic decisions
26. 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.
MV
Line of credit
Mission statement
Collections policies and procedures
27. Expenses of the organization incurred in non-health-care related activities.
Fixed costs
Coupon rate
Non-operating expenses
Debt service coverage
28. Operating income not reported elsewhere under revenues - gains - and other support.
Ratio analysis
Tangible assets
Other revenues
Mutually exclusive projects
29. [Inventory/ (Cost of Goods Sold/365)]
Working capital
Step Down
Spillover cash flows
Average Days Inventory
30. 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.
Collateral
Revenue budget
Mission statement
Budget variance
31. Financial and non-financial standards against which organizational performance is measured.
Coupon payment
Cash and cash equivalents
Performance measure
Cost Accounting
32. A budget in which line items are presented by program.
Operating budget
Program budget
Times interest earned
Not-for-profit
33. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Capital
Billing float
Equity financing
Performance measure
34. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Liquidity ratios
Long-term investments
Non-operating income
Common costs
35. Stated interest rate on a bond - as promised by the issuer.
G & A expenses
Mutually exclusive projects
Budget variance
Coupon rate
36. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Capital financing
Compounding
Activity ratios
Allocation base
37. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Mission Center
Strategic decisions
Cash flows from financing activities
Beginning inventory
38. 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.
Balance sheet
Creditor
Operating income
Allocation
39. 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.
Billing float
Average Days Receivable
Fixed Asset Turnover
Times interest earned
40. (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
Service centers
Depreciation
Fully allocated costs
41. 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.
Traditional profit centers
Mutually exclusive projects
Accumulated depreciation
Net patient service revenue
42. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Capital structure ratios
Expense cost variance
Market rate of interest
43. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Financing mix
FV
Income from investments
Operating revenues
44. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.
Bond rating
Fixed assets
Horizontal analysis
Direct costs
45. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Mutually exclusive projects
Cost of goods sold
Billing - collections - and disbursement policies and procedures
Capital budget
46. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Non-operating ratio
Quick ratio
Bonds
Cash flows from financing activities
47. 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.
Service centers
Cost of capital
Accounts payable
Collections policies and procedures
48. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
FV
Market rate of interest
ROI
Asset Management ratios
49. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Other revenues
Bad debt
Total asset turnover
Net assets to total assets
50. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Non-current liabilities
Restricted donation
Market rate of interest
Accounts receivable