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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
.
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. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Capital financing
Restricted donation
Statement of operations
Co-payments
2. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.
IRR
ABC
Return on total assets
Responsibility center
3. An entity that owns other companies.
Net Assets to Total Assets
Parent organization
Capital structure ratios
Top-down budgeting
4. 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
Realization principle
Fixed assets
Direct costs
5. A legal obligation to pay the holder of the note or lien.
Non-operating income
Times interest earned
Notes payable
Allocation
6. Being subject to sanctions with respect to carrying out responsibilities.
Accountability
Non-current liabilities
MV
Cash budget
7. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.
Coupon
Beginning inventory
Operating margin
Common costs
8. 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
Increase in unrestricted net assets
ABC
Discount rate
Net accounts receivable
9. Demonstrates the ability to pay off long term debt
Long Term Solvency ratios
Non-operating ratio
Cash equivalents
Operating income
10. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Coupon
Expense volume variance
Comparative approach
11. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Matching principle
ABC
Common costs
Cost of capital
12. Ratios designed to answer the question: How profitable is the organization?
Profitability ratios
Accrual basis of accounting
Other expenses
Spillover cash flows
13. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Capital structure ratios
Intermediate Cost Object
Collateral
Cash flows from financing activities
14. An investment that generates an annuity for an indefinite period of time - basically forever.
Perpetuity
Effectiveness
Allocation base
Operating income
15. Financial obligations that will be paid off over a time period longer than one year
Return on net assets
Discount rate
Non-current liabilities
Income from investments
16. Amounts the organization is obligated to pay others - including suppliers and creditors.
Strategic planning
Basis of Allocation
Accounts payable
Step-down method
17. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Activity Based Costing
Investment grade
Net increase (decrease) in cash and cash equivalents
Days cash on hand
18. The amount of time between when an organization receives a service and pays for it.
Disbursement float
Debt to equity
Responsibility center
ABC
19. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Properties and equipment - net
Loan amortization schedule
Strategic planning
Compounding
20. The increase in the value of an investment from the time it is purchased until the time it is sold.
Properties and equipment
Capital appreciation
Time value of money
Opportunity cost
21. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Statement of operations
Non-current assets
Quick ratio
Assets
22. 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.
Depreciation
Top-down/bottom-up approach
Ratio analysis
Opening inventory
23. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Debt to equity
Operating margin
ROI
Permanently restricted net assets
24. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.
Cash equivalents
Bond rating agency
Budget variance
Administrative profit centers
25. (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;
Properties and equipment
Statement of changes in net assets
Prepaid assets
Return on net assets
26. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Operating revenues
Financing activities
Tax-exempt bonds
Total asset turnover
27. 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.
Statement of changes in net assets
Cost avoidance
Cash budget
Basis of Allocation
28. 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.
Current liabilities
Discounted cash flows
Bonds
Parent organization
29. The section of the expense budget that forecasts salary and benefits.
Cash equivalents
Capital
Fixed labor budget
Times interest earned
30. 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
Cash flows from investing activities
Top-down/bottom-up approach
Fixed asset turnover
Operating income
31. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Mission Center
Long Term Solvency ratios
SWOT analysis
Net accounts receivable
32. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Certainty
Cash and cash equivalents
Mutually exclusive projects
33. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Accountability
Expense cost variance
Capital assets
34. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Cost of goods sold
Basis of Allocation
Line of credit
35. An entity that is owed money for lending funds or supplying goods or services on credit.
Financing mix
Operating margin
Creditor
Clinical cost centers
36. Budgets that typically cover two to five years.
Multiyear budget
Operating expenses
Not-for-profit
Operating income
37. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Cash and cash equivalents
Net accounts receivable
Top-down budgeting
Profit margin
38. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Collection float
Periodic payments
Coupon payment
Time value of money
39. 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.
Return on net assets
Line of credit
Working capital
Balance sheet
40. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Net Assets to Total Assets
Controlling activities
Discounting
Notes payable
41. 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
Line-item budget
Mutually exclusive projects
Opportunity cost
42. 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.
Budget variance
Expense cost variance
Capital assets
Excess of revenues over expenses
43. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Leverage
Fixed (interest) rate debt
Certainty
Mortgage bonds
44. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Quick ratio
Budget
Performance budget
Basic accounting equation
45. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Performance measure
Current liabilities
Current assets
Final cost object
46. An assignment or grading of the likelihood that an organization will not default on a bond.
Controlling activities
Return on net assets
Allocation base
Bond rating
47. 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
Cash flows from financing activities
Days cash on hand
Prepaid assets
Net Assets
48. 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.
Creditor
Fixed labor budget
Line of credit
Interest
49. Portion of the profits the organization keeps in-house to use in support of its mission.
Liquidity ratios
Retained earnings
Statement of changes in net assets
Bonds
50. 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
Allocation base
Book value
Bad debt