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ACCA Financial Management
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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. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor
Cash flows from investing activities
Annuity
Statement of changes in net assets
Opening inventory
2. The amount of time between when an organization receives a service and pays for it.
Disbursement float
Fixed labor budget
Horizontal analysis
Program budget
3. The percentage of each asset relative to total assets.
Cost centers
Operating activities
Accumulated depreciation
Asset mix
4. A good or service provided in return for some type of compensation.
Transaction
Final cost object
Basic accounting equation
Certainty
5. 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
Base Budget
Not-for-profit
Discounting
Strategic decisions
6. 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
Statement of operations
Allowance for uncollectibles
Cost avoidance
Properties and equipment
7. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Restricted donation
FV
Acid test ratio
Asset Turnover Ratio
8. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Cash basis of accounting
Leverage
Net increase (decrease) in cash and cash equivalents
Top-down/bottom-up approach
9. The idea that a dollar today is worth more than a dollar in the future.
Profit margin
Coupon payment
Days cash on hand
Time value of money
10. (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;
Return on net assets
Accounts receivable
Certainty
Dividends
11. The cost of the supplies on hand at the beginning of the year.
Comparative approach
Properties and equipment
Opening inventory
Operating margin
12. 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.
Net assets to total assets
Accrual basis of accounting
Expansion decisions
Strategic planning
13. A security interest in one or more assets granted to lenders in a secured loan.
Lien
Bad debt
Cost Accounting
Centralization
14. Non-operating income.
Book value
Current ratio
Strategic financial planning
Other income
15. 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.
Service centers
Bonds
Capital financing
Tangible assets
16. Gross proceeds less the underwriter's fee and other issuance fees.
Mortgage
Retained earnings
Net proceeds from a bond issuance
Perpetuity
17. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Properties and equipment - net
Performance budget
Operating cash flows
Other expenses
18. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Capital investment decisions
Income from investments
Cash flows from financing activities
Perpetuity
19. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Mutually exclusive projects
SWOT analysis
Net present value
Breakeven point
20. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Financing activities
Excess of revenues over expenses
Current liabilities
MV
21. The absence of risk in an investment.
Certainty
Leverage
Donation
Coupon rate
22. Proceeds lost by foregoing other opportunities.
Mortgage bonds
Discounted cash flows
Opportunity cost
Tangible assets
23. The difference between current assets and current liabilities.
Net working capital
Net accounts receivable
Depreciation
Strategic planning
24. 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).
Deferred revenues
Expense cost variance
Precautionary purposes
Disbursement float
25. Operating income not reported elsewhere under revenues - gains - and other support.
Collections policies and procedures
Non-operating income
Collection float
Other revenues
26. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.
FTE
FV
Administrative cost centers
Accounts receivable
27. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Responsibility center
FV
Disbursement float
Administrative cost centers
28. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
MV
Billing - collections - and disbursement policies and procedures
Mortgage bonds
Strategic financial planning
29. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Efficiency
Comparative approach
Operating cash flows
30. 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.
Product diversity
Tangible assets
Market rate of interest
Current ratio
31. 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.
Investor
Bad debt
Permanently restricted net assets
Cost object
32. The ease and speed with which an asset can be turned into cash.
Performance budget
Investment centers
Long Term Solvency ratios
Liquidity
33. Capital investment decisions designed to increase the operational capability of a health care organization.
Expansion decisions
Market rate of interest
Product diversity
Net present value
34. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Cost of capital
Profitability ratios
Statement of cash flows
Single/Simple Step
35. 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.
Permanently restricted net assets
Line of credit
ABC
Controlling activities
36. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Certainty
Mutually exclusive projects
Net assets to total assets
Other expenses
37. 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.
Cash budget
Cash and cash equivalents
HMO
Net present value
38. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.
MV
Ending inventory
Allowance for uncollectibles
Mortgage bonds
39. Stated interest rate on a bond - as promised by the issuer.
Net present value
Notes payable
Coupon rate
Collection float
40. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Non-operating ratio
Incremental cash flows
Operating budget
Efficiency
41. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Clinical cost centers
Debt service coverage
Operating income
Net Assets to Total Assets
42. [(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
Responsibility center
Acid test ratio
Activity Based Costing
Debt service coverage
43. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Activity Based Costing
Beginning inventory
Non-operating revenues
Controlling activities
44. The cash flows derived from an organization's operating activities.
Ratio analysis
Cash and cash equivalents
Operating cash flows
Capital appreciation
45. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Capital budget
Statement of cash flows
Operating revenues
Depreciation
46. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Investor
Quick ratio
Equity financing
Net proceeds from a bond issuance
47. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Operating expenses
Financing activities
Service centers
Periodic payments
48. Private entity or individual who makes a donation
Operating activities
Decentralization
Donor
Precautionary purposes
49. [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
Statement of operations
Certainty
Present value of an annuity
Long-term debt to net assets ratio
50. Each service center
Cost of capital
Liquidity ratios
Excess of revenues over expenses
Single/Simple Step
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