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






2. An entity that is owed money for lending funds or supplying goods or services on credit.






3. 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).






4. Revenue is recorded when goods or services are delivered






5. 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






6. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






7. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






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






9. 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.






10. (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






11. The elapsed time between financial statements. Common accounting periods






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






13. Return on investment. The percentage gain or loss experienced from an investment.






14. 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.






15. 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.






16. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






17. What a series of equal payments in the future is worth today taking into account the time value of money.






18. {current liabilities/[(total expenses






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






20. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






21. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






22. 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.






23. The ease and speed with which an asset can be turned into cash.






24. Debt to be paid off in a period longer than one year.






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






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






27. 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.






28. Capital investment decisions designed to increase the operational capability of a health care organization.






29. [Total assets/Net Assets]






30. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






31. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






32. Proceeds lost by foregoing other opportunities.






33. 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.






34. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






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






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






37. [Surplus/Operating Revenues]






38. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






39. Costs that are traced to a cost object. See also Indirect costs and Cost object.






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






41. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






43. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






44. 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






45. 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.






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






47. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






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. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






50. 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.