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ACCA Financial Management
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certifications
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
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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. 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.
Deferred revenues
Liabilities
Program budget
Net proceeds from a bond issuance
2. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Service centers
Donation
Capital assets
Non-operating expenses
3. A legal obligation to pay the holder of the note or lien.
Interest
Notes payable
Budget
Cash and cash equivalents
4. [Total assets/Net Assets]
G & A expenses
Step-down method
Leverage
Prepaid assets
5. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Long-term financing
Hedge
Market rate of interest
Fixed asset turnover
6. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Assets
Income from investments
Operating budget
Budget variance
7. The elapsed time between financial statements. Common accounting periods
Accounting period
ABC
G & A expenses
Operating budget
8. The current traded rate for similar risk securities.
Operating income
Expense volume variance
Parent organization
Market rate of interest
9. Operating income not reported elsewhere under revenues - gains - and other support.
Allowance for uncollectibles
Bond rating agency
Other revenues
Depreciation
10. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Bond rating
Mortgage
Activity Based Costing
11. An organization's financial obligations that are to be paid within one year.
Capital structure ratios
Realization principle
Current liabilities
Annuity
12. 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.
Net assets to total assets
Fixed assets
Line of credit
Income from investments
13. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)
IRR
Billing float
Present value of an annuity
Basis of Allocation
14. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Efficiency
Allocation base
Expense budget
Revenue budget
15. The absence of risk in an investment.
Debt to equity
Issuer
Certainty
Bond rating agency
16. 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.
Long-term investments
Non-current liabilities
Capital structure ratios
Bonds
17. [Total Revenues/ Total Assets]
Single/Simple Step
Liquidity ratios
Asset Turnover Ratio
Mission Center
18. process of measuring the resources (costs) used to produce results.
Net assets released from restriction
Cost Accounting
Deferred revenues
Line-item budget
19. An entity that owns other companies.
Parent organization
Comparative approach
Operating income
Activity Based Costing
20. Responsibility centers responsible for making a certain return on investments.
Discounting
Average payment period
Investment centers
Transaction
21. Ratios designed to answer the question: How profitable is the organization?
Matching principle
Top-down budgeting
Cost Accounting
Profitability ratios
22. The amount of time between when an organization receives a service and pays for it.
Mission statement
Long-term debt to net assets ratio
Disbursement float
Operating activities
23. 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.
Operating expenses
Performance budget
Accumulated depreciation
ROI
24. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Precautionary purposes
Coupon payment
Opportunity cost
Total revenue
25. Amounts earned by the organization from the provision of service or sale of goods.
Billing - collections - and disbursement policies and procedures
Horizontal analysis
Net patient service revenue
Revenues
26. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Payback
Increase in unrestricted net assets
Incremental cash flows
Matching principle
27. Irregular cash flows - typically occurring at the end of the life of a project.
Non-regular cash flows
FTE
Profit margin
Coupon payment
28. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Mortgage bonds
Accrued expenses
Ratio analysis
Current assets
29. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Asset Management ratios
Budget variance
Cash basis of accounting
Horizontal analysis
30. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Permanently restricted net assets
Net proceeds from a bond issuance
Spillover cash flows
Revenues
31. Financing that will be paid back in less than one year.
Fully allocated costs
Short-term financing
Contribution margin
Product diversity
32. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Disbursement float
Asset mix
Product diversity
Fixed costs
33. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Strategic decisions
Direct costs
Current ratio
Accounting period
34. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Bonds
Tax-exempt bonds
Administrative profit centers
Activity ratios
35. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Investment centers
Intermediate Cost Object
Administrative cost centers
Asset Management ratios
36. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Budget
Net assets released from restriction
Quick ratio
Final cost object
37. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Capital budget
Line of credit
Fixed supplies budget
38. 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.
Bad debt
Perpetuity
Activity Based Costing
Net patient service revenue
39. Full-time equivalent employees. Two half-time employees equal one FTE.
FTE
Expense volume variance
Comparative approach
Volume diversity
40. Assets that have a physical presence.
Fixed asset turnover
Tangible assets
Short-term financing
Decentralization
41. Portion of the profits the organization keeps in-house to use in support of its mission.
Cost of goods sold
Retained earnings
Incremental cash flows
Cash flows from financing activities
42. 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
Final cost object
HMO
Debt service coverage
Depreciation
43. A note payable that has as collateral real assets and that requires periodic payments.
Investment grade
Average Days Inventory
Mortgage
Fixed Asset Turnover
44. Supplementing traditional sources of revenue with new sources.
Average Days Inventory
Revenues
Cost avoidance
Revenue enhancement
45. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Liquidity
SWOT analysis
Times interest earned
Clinical cost centers
46. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Certainty
Short-term financing
Activity Based Costing
Ending inventory
47. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?
Performance budget
Decentralization
Prepaid assets
Statement of cash flows
48. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Mission Center
Other income
Revenue budget
Cost of capital
49. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Beginning inventory
G & A expenses
Administrative cost centers
Net present value
50. 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.
Statement of operations
Balance sheet
Capital budget
Average payment period
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