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Test your basic knowledge |
ACCA Financial Management
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Study First
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. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Liquidity
Operating margin
Net present value
Net patient service revenue
2. Financial obligations that will be paid off over a time period longer than one year
Expansion decisions
Quick ratio
Volume diversity
Non-current liabilities
3. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Bad debt
Capital structure ratios
Book value
Collateral
4. 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
Liquidity
Fixed assets
Efficiency
ABC
5. 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).
Capital structure decision
Average payment period
Net assets released from restriction
Fixed supplies budget
6. Supplementing traditional sources of revenue with new sources.
Revenue rate variance
Average Days Receivable
Debt service coverage
Revenue enhancement
7. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Present value of an annuity
Expense volume variance
Other revenues
8. 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.
Notes payable
Collection float
Net present value
Capital investment decisions
9. 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 flows from financing activities
Financing mix
Mortgage
Cash budget
10. The amount of supplies used to provide a service or good.
Mission Center
Operating expenses
Accounts receivable
Cost of goods sold
11. 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.
Balance sheet
Ratio analysis
Dividends
Bonds
12. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Not-for-profit
Capital investment decisions
Opening inventory
Long-term investments
13. [(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
Debt to equity
Single/Simple Step
Periodic payments
Expense volume variance
14. {current liabilities/[(total expenses
Average payment period
Top-down budgeting
Long-term debt to net assets ratio
Dividends
15. A situation in which if one project is implemented the other(s) will not be.
Coupon rate
Loan amortization schedule
Liabilities
Mutually exclusive projects
16. A transaction that reduces the risk of an investment.
Allowance for uncollectibles
Fixed costs
Hedge
Common costs
17. The budget used to forecast operating expenses.
Step-down method
Net working capital
Net assets to total assets
Expense budget
18. Debt to be paid off in a period longer than one year.
Long-term financing
Comparative approach
Allocation
Fixed supplies budget
19. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Fixed (interest) rate debt
ROI
Intermediate Cost Object
20. Irregular cash flows - typically occurring at the end of the life of a project.
Discounted cash flows
Market rate of interest
ROI
Non-regular cash flows
21. Donated assets that have restrictions on their use which will never be removed.
Other expenses
Permanently restricted net assets
Short-term financing
Single/Simple Step
22. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Performance measure
Fixed Asset Turnover
Other expenses
Average payment period
23. The percentage of each asset relative to total assets.
Asset mix
Investor
G & A expenses
Matching principle
24. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Collections policies and procedures
Return on net assets
Coupon rate
Non-current assets
25. 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?
Non-operating revenues
Cost object
Non-current assets
Statement of cash flows
26. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Short-term financing
Investor
Quick ratio
Net assets released from restriction
27. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Line-item budget
Discounting
Strategic decisions
Budget variance
28. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Cost of capital
Comparative approach
Working capital
Mail float
29. [Total assets/Net Assets]
Discounted cash flows
Donation
Equity financing
Leverage
30. Gross proceeds less the underwriter's fee and other issuance fees.
Direct costs
Non-regular cash flows
Net proceeds from a bond issuance
Cash budget
31. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Budget variance
Coupon
Statement of cash flows
Budget
32. 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
Certainty
Expansion decisions
Cash flows from investing activities
MV
33. The expenses incurred from an organization's operating activities.
Short-term financing
Opening inventory
Operating expenses
IRR
34. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Current liabilities
Prepaid assets
Footnotes
Donation
35. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.
Allocation
Performance budget
Float
Total asset turnover
36. 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.
Cost of capital
Operating revenues
Performance measure
IRR
37. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Capital
Expense volume variance
Asset mix
Top-down/bottom-up approach
38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Amortization of a loan
Investment centers
Liquidity ratios
Activity Based Costing
39. The degree of dispersion of responsibility within an organization. See also Centralization.
Operating revenues
Decentralization
Current ratio
Accrued expenses
40. Being subject to sanctions with respect to carrying out responsibilities.
Controlling activities
Lease
Accountability
Notes payable
41. 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.
Cost of capital
Properties and equipment
Operating activities
Cost avoidance
42. Private entity or individual who makes a donation
Donor
Issuer
Opening inventory
Collection float
43. 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.
Temporarily restricted net assets
Cost Accounting
Average payment period
Product diversity
44. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Income from investments
Capital financing
Operating revenues
Allocation
45. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Beginning inventory
Annuity
Profit margin
Operating activities
46. Portion of the profits the organization keeps in-house to use in support of its mission.
Final cost object
Lien
Bad debt
Retained earnings
47. Budgets that typically cover two to five years.
Asset Management ratios
Interest
Billing - collections - and disbursement policies and procedures
Multiyear budget
48. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Revenue budget
Coupon rate
Mail float
Bad debt
49. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Breakeven point
Mail float
ABC
Indirect costs
50. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization
Long-term debt - net of current portion
Times interest earned
Debt service coverage
Revenue rate variance