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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
business-skills
,
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. Debt to be paid off in a period longer than one year.
Contribution margin
Long-term financing
Tax-exempt bonds
Beginning inventory
2. Responsibility centers responsible for making a certain return on investments.
Non-operating revenues
Average payment period
Mission Center
Investment centers
3. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Strategic decisions
For-profit
Tangible assets
Asset Management ratios
4. Directly related to the purposes of the organization and the delivery of services
Mission Center
Mutually exclusive projects
Traditional profit centers
Strategic decisions
5. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Balance sheet
Expenses
Book value
Donation
6. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Step Down
Service centers
Creditor
Capital structure ratios
7. Expenses of the organization incurred in non-health-care related activities.
Non-operating expenses
Debt service coverage
Profitability ratios
Fixed asset turnover
8. The increase in the value of an investment from the time it is purchased until the time it is sold.
Allocation
Investment grade
Total revenue
Capital appreciation
9. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Fixed asset turnover
Market rate of interest
Equity financing
Bond rating agency
10. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Bond rating agency
Performance measure
Float
Interest
11. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.
Net working capital
Fully allocated costs
Deferred revenues
Expense cost variance
12. [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
Net accounts receivable
Coupon
Accounting period
Long-term debt to net assets ratio
13. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Investment centers
Issuer
Efficiency
G & A expenses
14. An investment that generates an annuity for an indefinite period of time - basically forever.
Net accounts receivable
Working capital
Perpetuity
Current liabilities
15. [(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
Market rate of interest
Expense volume variance
Fixed asset turnover
Performance measure
16. The changes in cash resulting from the normal operating activities of the organization.
Top-down budgeting
Net increase (decrease) in cash and cash equivalents
Cash flows from operating activities
Allowance for uncollectibles
17. 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.
Assets
Cost
Accrued expenses
Liabilities
18. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Cost avoidance
Allocation base
Long-term debt to net assets ratio
19. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Service centers
Equity financing
Administrative cost centers
Properties and equipment - net
20. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Retained earnings
Accumulated depreciation
Acid test ratio
Performance budget
21. (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;
Income from investments
Permanently restricted net assets
Issuer
Return on net assets
22. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Financing activities
Mutually exclusive projects
Cash basis of accounting
Cost object
23. 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.
Float
Cash equivalents
Interest
ABC
24. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.
Opportunity cost
Mortgage
Line-item budget
Operating margin
25. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Average Days Inventory
Current assets
Final cost object
Transaction
26. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Fixed labor budget
Non-regular cash flows
Net Assets to Total Assets
Cash equivalents
27. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Loan amortization schedule
Cost
Base Budget
Non-operating expenses
28. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Lender
Allocation
Bad debt
Statement of operations
29. Portion of the profits the organization keeps in-house to use in support of its mission.
Retained earnings
Collections policies and procedures
Cost
Net patient service revenue
30. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Net increase (decrease) in cash and cash equivalents
Accounting period
Cost Accounting
Investor
31. [Surplus/Operating Revenues]
Basis of Allocation
Profit margin
Net assets to total assets
Accounting period
32. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Other support
Ratio analysis
Asset Management ratios
Cost object
33. Operating income not reported elsewhere under revenues - gains - and other support.
Volume diversity
Current ratio
Long-term debt to net assets ratio
Other revenues
34. The amount of supplies used to provide a service or good.
Asset mix
Non-regular cash flows
Cost of goods sold
Ending inventory
35. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Net Assets
Incremental cash flows
Cost
Strategic planning
36. Non-operating income.
Current ratio
Disbursement float
Mission statement
Other income
37. 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.
ABC
Capital assets
Bond rating
Financing activities
38. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Capital assets
Discount rate
Revenue enhancement
Coupon
39. The idea that a dollar today is worth more than a dollar in the future.
Compounding
Expense volume variance
Time value of money
Budget
40. The degree to which standards are met.
Ending inventory
Deferred revenues
Effectiveness
Net assets to total assets
41. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
Depreciation
Responsibility center
Dividends
Debt to equity
42. Full-time equivalent employees. Two half-time employees equal one FTE.
Billing - collections - and disbursement policies and procedures
FTE
Statement of cash flows
Restricted donation
43. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Cash flows from operating activities
Capital financing
Collateral
Certainty
44. The cash flows derived from an organization's operating activities.
Cash flows from financing activities
Operating cash flows
Annuity
Opportunity cost
45. [Inventory/ (Cost of Goods Sold/365)]
Cost centers
Average Days Inventory
Properties and equipment
Non-current assets
46. An assignment or grading of the likelihood that an organization will not default on a bond.
Accounts payable
Allocation base
Bond rating
Cost object
47. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Accounts payable
Income from investments
Top-down/bottom-up approach
Properties and equipment
48. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Cash flows from investing activities
Strategic decisions
Non-operating income
Balance sheet
49. Proceeds lost by foregoing other opportunities.
Opportunity cost
Other expenses
Non-current assets
Cost of capital
50. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Working capital
Other revenues
Revenue rate variance
Profitability ratios