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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. Directly related to the purposes of the organization and the delivery of services






2. The degree of dispersion of responsibility within an organization. See also Centralization.






3. Expenses that have been incurred - but not yet paid.






4. Expenses of the organization incurred in non-health-care related activities.






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






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






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






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






9. Amounts due to the organization from patients - third parties - and others.






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






11. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






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






14. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






15. Financial and non-financial standards against which organizational performance is measured.






16. Budgets that typically cover two to five years.






17. 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.






18. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






19. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






20. The current traded rate for similar risk securities.






21. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






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






24. The activities of an organization directly related to its main line of business.






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






26. The costs of a service after taking into account its direct and fair share of allocated costs.






27. Revenues generated from an organization's operating activities.






28. 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






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






30. The rise in an economy's general level of prices.






31. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






32. 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






33. 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.






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






35. [(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






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






37. An assignment or grading of the likelihood that an organization will not default on a bond.






38. (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;






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






40. [Surplus/Operating Revenues]






41. The absence of risk in an investment.






42. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






43. The cost of activities that take place to produce the final cost object






44. [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).






45. Revenue is recorded when goods or services are delivered






46. Private entity or individual who makes a donation






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






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






49. Amounts the organization is obligated to pay others - including suppliers and creditors.






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