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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. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






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






3. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






4. 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






5. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






6. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






7. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






8. Proceeds lost by foregoing other opportunities.






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






10. [Inventory/ (Cost of Goods Sold/365)]






11. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






12. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






13. 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.






14. The purchase of assets with contributed and internally generated funds. See also Debt financing.






15. (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






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






17. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






18. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






19. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






20. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






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






22. The idea that a dollar today is worth more than a dollar in the future.






23. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






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






25. {current liabilities/[(total expenses






26. Supplementing traditional sources of revenue with new sources.






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






28. Full-time equivalent employees. Two half-time employees equal one FTE.






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






30. Ratios designed to answer the question: How profitable is the organization?






31. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






32. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






33. 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.






34. Recording expenses associated with making revenue at the same time as revenues are recognized






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






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






37. 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.






38. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






39. 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.






40. 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.






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






42. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






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






45. [(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.






46. 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






47. Literally non-movable assets. Generally used to refer to buildings and equipment.






48. Portion of the profits the organization keeps in-house to use in support of its mission.






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






50. An entity that sells bonds in order to raise money.