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Test your basic knowledge |
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. The cost of the supplies on hand at the beginning of the year.
Administrative profit centers
Direct costs
Opening inventory
Long-term debt to net assets ratio
2. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.
Loan amortization schedule
Long-term financing
Fixed (interest) rate debt
Other income
3. 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
Net Assets
Centralization
Expenses
Non-operating ratio
4. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Top-down budgeting
Top-down/bottom-up approach
Net accounts receivable
FTE
5. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Bond rating agency
Excess of revenues over expenses
Step Down
Mission Center
6. 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.
Net increase (decrease) in cash and cash equivalents
Billing - collections - and disbursement policies and procedures
Line of credit
Operating revenues
7. The percentage of each asset relative to total assets.
Interest
Asset mix
Responsibility center
Direct costs
8. The budget used to forecast operating expenses.
ROI
Expense budget
Non-current assets
Strategic decisions
9. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Traditional profit centers
Line of credit
Footnotes
Accumulated depreciation
10. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.
Capital assets
Dividends
Mission statement
Strategic decisions
11. 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.
Bond rating agency
Cost
Donation
Step-down method
12. The absence of risk in an investment.
Long Term Solvency ratios
Acid test ratio
Program budget
Certainty
13. A good or service provided in return for some type of compensation.
Depreciation
Net working capital
Transaction
MV
14. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Long-term debt to net assets ratio
Other support
Cost of capital
Liquidity
15. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Horizontal analysis
Lender
IRR
Administrative cost centers
16. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Bond rating
Activity ratios
Capital financing
Net accounts receivable
17. Revenue is recorded when goods or services are delivered
Multiyear budget
Realization principle
Book value
Clinical cost centers
18. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Inflation
Performance measure
Controlling activities
Capital
19. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Cost
Common costs
Acid test ratio
Liquidity ratios
20. A legal obligation to pay the holder of the note or lien.
IRR
Notes payable
Asset mix
Liabilities
21. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Acid test ratio
Collections policies and procedures
MV
Income from investments
22. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Donor
Prepaid assets
Product diversity
FV
23. Amounts due to the organization from patients - third parties - and others.
Other support
Mission Center
Accounts receivable
Operating margin
24. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Allocation
Net assets released from restriction
Investor
Basis of Allocation
25. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Discounting
Revenue rate variance
Float
Accumulated depreciation
26. 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.
Mission Center
Allocation base
Accrued expenses
Present value of an annuity
27. 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
Creditor
ABC
Cost Accounting
Balance sheet
28. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Clinical cost centers
Operating income
Revenue budget
Responsibility center
29. 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
Not-for-profit
Net accounts receivable
Debt service coverage
Top-down/bottom-up approach
30. The section of the expense budget that forecasts salary and benefits.
Fixed labor budget
Revenue enhancement
Average Days Inventory
Realization principle
31. The difference between what was planned (budgeted) and what was achieved (actual).
Precautionary purposes
Budget variance
Line-item budget
Coupon payment
32. Amounts earned by the organization from the provision of service or sale of goods.
Non-regular cash flows
Investment grade
Current ratio
Revenues
33. 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
Contribution margin
Mortgage bonds
Assets
Cash budget
34. 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.
Accrual basis of accounting
Collateral
Bonds
Fixed supplies budget
35. The elapsed time between financial statements. Common accounting periods
Other support
Accounting period
Performance measure
Cash equivalents
36. 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.
ABC
Basic accounting equation
Top-down/bottom-up approach
Liabilities
37. The ease and speed with which an asset can be turned into cash.
Base Budget
Volume diversity
Liquidity
Step-down method
38. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Allocation
Donation
ABC
Long Term Solvency ratios
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.
Liquidity ratios
Cash flows from operating activities
Accrual basis of accounting
Cost avoidance
40. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Non-current liabilities
Long Term Solvency ratios
Investment grade
41. 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?
Creditor
Statement of cash flows
Properties and equipment
Cost of goods sold
42. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net increase (decrease) in cash and cash equivalents
Permanently restricted net assets
Capital financing
Top-down/bottom-up approach
43. The revenue and expense budgets of an organization.
Mortgage
Opportunity cost
Operating budget
Accrued expenses
44. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.
Operating revenues
Ratio analysis
Non-operating revenues
Cost
45. The degree to which standards are met.
Strategic planning
Effectiveness
Non-operating expenses
Liquidity ratios
46. 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.
Service centers
Dividends
Non-operating income
Non-operating revenues
47. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.
Fixed supplies budget
Depreciation
Discounted cash flows
Product diversity
48. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Step-down method
Cash equivalents
Discounting
Net assets to total assets
49. Financing used expressly for the purchase of non-current assets.
Accrual basis of accounting
Capital financing
Debt to equity
Depreciation
50. Irregular cash flows - typically occurring at the end of the life of a project.
Collection float
Current ratio
Bond rating
Non-regular cash flows