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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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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. Non-operating income.






2. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






3. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






4. 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?






5. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






6. [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






7. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






8. Series of payments over time - such as interest paid to bondholders.






9. {[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).






10. 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.






11. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






12. Financial obligations that will be paid off over a time period longer than one year






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






14. 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.






15. The difference between current assets and current liabilities.






16. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






17. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






18. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






19. The difference between what was planned (budgeted) and what was achieved (actual).






20. 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.






21. A note payable that has as collateral real assets and that requires periodic payments.






22. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






23. An investment that generates an annuity for an indefinite period of time - basically forever.






24. An organization's financial obligations that are to be paid within one year.






25. 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.






26. An entity that is owed money for lending funds or supplying goods or services on credit.






27. The changes in cash resulting from the normal operating activities of the organization.






28. 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.






29. Financial and non-financial standards against which organizational performance is measured.






30. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






31. 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.






32. 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).






33. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






34. 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.






35. Expenses of the organization incurred in non-health-care related activities.






36. An entity that sells bonds in order to raise money.






37. An entity that owns other companies.






38. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






39. The resources owned by the organization. It is one of the three major categories on the balance sheet.






40. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






41. A transaction that reduces the risk of an investment.






42. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






43. 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.






44. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






45. Being subject to sanctions with respect to carrying out responsibilities.






46. Budgets that typically cover two to five years.






47. Full-time equivalent employees. Two half-time employees equal one FTE.






48. 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).






49. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






50. Revenues of the organization earned in non-healthcare related activities.







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