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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
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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. Financial obligations that will be paid off over a time period longer than one year
Cost avoidance
Intermediate Cost Object
Budget
Non-current liabilities
2. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Operating expenses
Mortgage bonds
Bad debt
Net patient service revenue
3. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Common costs
Non-regular cash flows
Days cash on hand
Capital assets
4. A good or service provided in return for some type of compensation.
Service centers
ABC
Transaction
Revenue enhancement
5. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Capital budget
Total revenue
Single/Simple Step
6. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Non-operating ratio
Increase in unrestricted net assets
Cost
Co-payments
7. The degree to which standards are met.
Breakeven point
Effectiveness
Cost
Mission Center
8. 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
Short-term financing
Depreciation
Coupon rate
Current assets
9. 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
Operating income
Ratio analysis
Strategic planning
10. [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
Operating budget
Lien
Long-term debt to net assets ratio
Operating cash flows
11. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Cost of capital
Strategic planning
SWOT analysis
Budget variance
12. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Breakeven point
Collections policies and procedures
Liabilities
13. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Accrual basis of accounting
Non-regular cash flows
Budget variance
Excess of revenues over expenses
14. Service center costs are allocated to both mission centers and other service centers
Accrued expenses
Step Down
Average payment period
Base Budget
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
Expense volume variance
Operating activities
Compounding
Non-operating ratio
16. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Investment grade
Return on net assets
Fixed costs
Current assets
17. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Investment centers
Time value of money
Acid test ratio
Liquidity
18. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Fixed asset turnover
Top-down/bottom-up approach
Donor
Periodic payments
19. 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.
Discounted cash flows
Cash flows from investing activities
Current ratio
Fixed costs
20. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme
Statement of operations
Cost of goods sold
Total asset turnover
Debt to equity
21. 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 avoidance
Fixed asset turnover
Strategic decisions
Operating activities
22. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.
ABC
Cost of goods sold
Annuity
Budget variance
23. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Payback
Expansion decisions
Revenue budget
Expenses
24. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income
Performance budget
Debt service coverage
Compounding
Average Days Inventory
25. 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.
Basic accounting equation
Comparative approach
Cash flows from investing activities
Line of credit
26. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.
Capital
Horizontal analysis
Fixed supplies budget
Other income
27. 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.
Ratio analysis
Intermediate Cost Object
Cash basis of accounting
Donor
28. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Investor
Investment centers
Traditional profit centers
Average Days Inventory
29. Portion of the profits the organization keeps in-house to use in support of its mission.
Retained earnings
Liquidity
Breakeven point
Statement of changes in net assets
30. 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.
Expense cost variance
Perpetuity
Profitability ratios
Bad debt
31. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Net patient service revenue
Permanently restricted net assets
Net assets to total assets
Asset Turnover Ratio
32. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Discount rate
Indirect costs
Excess of revenues over expenses
Float
33. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
ABC
Acid test ratio
Coupon payment
Cost object
34. Budgets that typically cover two to five years.
Bonds
Multiyear budget
Precautionary purposes
Opening inventory
35. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
IRR
Mail float
Non-current assets
Not-for-profit
36. 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.
Average Days Inventory
Financing activities
Cash budget
Other revenues
37. The section of the expense budget that forecasts salary and benefits.
Operating income
Fixed labor budget
Centralization
Equity financing
38. The activities of an organization directly related to its main line of business.
Float
Performance budget
Operating activities
Bonds
39. The amount of time between when an organization receives a service and pays for it.
Average Days Inventory
Asset mix
Other revenues
Disbursement float
40. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Line of credit
Temporarily restricted net assets
Periodic payments
Net assets released from restriction
41. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Budget
Lien
Statement of operations
Prepaid assets
42. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Net assets released from restriction
Revenues
Restricted donation
Inflation
43. The idea that a dollar today is worth more than a dollar in the future.
Cost avoidance
Mortgage
Time value of money
Net working capital
44. Financing used expressly for the purchase of non-current assets.
Capital financing
Increase in unrestricted net assets
Top-down/bottom-up approach
Accrued expenses
45. The amount of supplies used to provide a service or good.
FV
Incremental cash flows
Operating expenses
Cost of goods sold
46. (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;
Return on net assets
Base Budget
Cash flows from investing activities
Cost
47. Recording expenses associated with making revenue at the same time as revenues are recognized
Matching principle
Discount rate
Not-for-profit
Long Term Solvency ratios
48. 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
Excess of revenues over expenses
Net Assets
Return on net assets
Performance budget
49. 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?
Statement of cash flows
Strategic financial planning
Net patient service revenue
Net assets to total assets
50. A security interest in one or more assets granted to lenders in a secured loan.
Lien
Accrued expenses
Accounts payable
Capital financing