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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. 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.






2. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






3. A method by which the organization develops its strategies and budgets to meet future financial targets.






4. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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






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






7. 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.






8. The difference between current assets and current liabilities.






9. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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






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






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






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






14. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






15. A budget in which line items are presented by program.






16. How an organization chooses to finance its working capital needs.






17. Demonstrates the ability to pay off long term debt






18. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






20. Each service center






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






22. The cash flows derived from an organization's operating activities.






23. Stated interest rate on a bond - as promised by the issuer.






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






25. 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.






26. Proceeds lost by foregoing other opportunities.






27. {current liabilities/[(total expenses






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






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






30. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






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






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






33. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






34. Ratios that measure how efficiently an organization is using its assets to produce revenues.






35. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






36. An investment that generates an annuity for an indefinite period of time - basically forever.






37. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






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.






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






40. Revenues of the organization earned in non-healthcare related activities.






41. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






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






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






44. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






45. Debt to be paid off in a period longer than one year.






46. 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.






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






48. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






49. 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.






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