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






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






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






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






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






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






7. 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






8. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






9. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






10. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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.






12. Series of payments over time - such as interest paid to bondholders.






13. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






14. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






15. 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.






16. [Net Accounts Receivable/(Revenue/356)]






17. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






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






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






20. [(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






21. Each service center






22. 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.






23. Properties and equipment less accumulated depreciation.






24. The current traded rate for similar risk securities.






25. 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.






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






27. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






29. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






30. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






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






32. {current liabilities/[(total expenses






33. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






34. (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;






35. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






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






37. 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.






38. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






40. 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.






41. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






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






43. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






44. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






45. Current assets. Net working capital equals current assets –current liabilities.






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






47. 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.






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






49. [Surplus/Operating Revenues]






50. Assets that have a physical presence.