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ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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 technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
G & A expenses
Dividends
Properties and equipment
SWOT analysis
2. 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).
Certainty
Capital structure decision
Fixed supplies budget
Quick ratio
3. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Mission statement
Volume diversity
Fixed costs
Excess of revenues over expenses
4. The increase in the value of an investment from the time it is purchased until the time it is sold.
Net proceeds from a bond issuance
Non-regular cash flows
Capital assets
Capital appreciation
5. The cost of activities that take place to produce the final cost object
Quick ratio
Cash budget
Intermediate Cost Object
Perpetuity
6. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Non-current assets
Fixed asset turnover
Average Days Receivable
7. 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.
Cash budget
Debt service coverage
Float
Line of credit
8. The costs of a service after taking into account its direct and fair share of allocated costs.
MV
Beginning inventory
Fully allocated costs
Operating margin
9. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.
Current ratio
Administrative cost centers
Certainty
Not-for-profit
10. The difference between what was planned (budgeted) and what was achieved (actual).
Other income
Properties and equipment - net
Budget variance
Top-down budgeting
11. The total amount of multiyear debt due in future years.
Lender
Mortgage
Long-term debt - net of current portion
Time value of money
12. Revenue is recorded when goods or services are delivered
Cash and cash equivalents
Opening inventory
Market rate of interest
Realization principle
13. 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
Fixed (interest) rate debt
Lien
Assets
Not-for-profit
14. Amounts the organization is obligated to pay others - including suppliers and creditors.
Footnotes
Realization principle
Cash and cash equivalents
Accounts payable
15. 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.
Liabilities
Net present value
Other support
Times interest earned
16. Debt to be paid off in a period longer than one year.
Perpetuity
Acid test ratio
Long-term financing
Intermediate Cost Object
17. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Fixed costs
Disbursement float
Cost
Statement of changes in net assets
18. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Activity ratios
Market rate of interest
Allocation
Equity financing
19. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Payback
Mortgage bonds
SWOT analysis
Depreciation
20. 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.
Revenue rate variance
Investment centers
Tax-exempt bonds
Net present value
21. A security interest in one or more assets granted to lenders in a secured loan.
Realization principle
Lien
Net patient service revenue
Quick ratio
22. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Expense volume variance
Return on net assets
Net proceeds from a bond issuance
23. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Cost
Lender
Short-term financing
Direct costs
24. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Asset Management ratios
Debt service coverage
Collateral
Present value of an annuity
25. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Compounding
Co-payments
Annuity
Bonds
26. 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
Interest
Total asset turnover
HMO
Capital investment decisions
27. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.
Single/Simple Step
Payback
Collections policies and procedures
Opportunity cost
28. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.
Parent organization
Discount rate
Return on net assets
Net accounts receivable
29. (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.
Line-item budget
Return on total assets
Discount rate
SWOT analysis
30. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Expenses
Net assets released from restriction
Current ratio
Increase in unrestricted net assets
31. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Investment grade
Incremental cash flows
Asset Turnover Ratio
Acid test ratio
32. [Total assets/Net Assets]
Leverage
Present value of an annuity
Income from investments
Operating expenses
33. (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;
Fixed supplies budget
Interest
Step-down method
Return on net assets
34. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Prepaid assets
Accounting period
Billing float
Operating activities
35. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Long-term investments
Amortization of a loan
Effectiveness
Cost of goods sold
36. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Bad debt
Investor
Accounts payable
Tax-exempt bonds
37. Proceeds lost by foregoing other opportunities.
Opportunity cost
Multiyear budget
Return on total assets
Net assets to total assets
38. [Total Revenues/ Total Assets]
Accounts payable
Precautionary purposes
Asset Turnover Ratio
Collection float
39. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.
Cash equivalents
Non-current assets
Cost avoidance
Other expenses
40. 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).
Cost
Deferred revenues
Statement of operations
Accounting period
41. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Bond rating agency
Comparative approach
Fixed supplies budget
Net patient service revenue
42. 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
Donor
Net Assets
Comparative approach
Total asset turnover
43. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Basic accounting equation
Discounted cash flows
IRR
Administrative profit centers
44. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Fixed supplies budget
Responsibility center
Fixed Asset Turnover
45. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Other income
Budget variance
Indirect costs
Other expenses
46. [Surplus/Operating Revenues]
Fully allocated costs
Basic accounting equation
Mortgage bonds
Profit margin
47. Financial and non-financial standards against which organizational performance is measured.
Performance measure
Present value of an annuity
Budget variance
Investor
48. Costs that are traced to a cost object. See also Indirect costs and Cost object.
MV
Expansion decisions
Bad debt
Direct costs
49. The revenue and expense budgets of an organization.
Operating budget
Certainty
Perpetuity
Service centers
50. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Net present value
Expenses
Net assets to total assets
Acid test ratio