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ACCA Financial Management

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. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






2. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






3. Financing that will be paid back in less than one year.






4. 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






5. Debt to be paid off in a period longer than one year.






6. Current assets. Net working capital equals current assets –current liabilities.






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






8. The revenue and expense budgets of an organization.






9. [(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






10. 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.






11. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






12. Service center costs are allocated to both mission centers and other service centers






13. Operating income not reported elsewhere under revenues - gains - and other support.






14. 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.






15. The elapsed time between financial statements. Common accounting periods






16. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






17. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






18. The budget used to forecast operating expenses.






19. 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






20. The percentage of each asset relative to total assets.






21. A budget in which line items are presented by program.






22. [Net Accounts Receivable/(Revenue/356)]






23. An assignment or grading of the likelihood that an organization will not default on a bond.






24. 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






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






26. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






27. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






28. 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






29. Responsibility centers responsible for making a certain return on investments.






30. Financing used expressly for the purchase of non-current assets.






31. The income (operating revenues -operating expenses) earned in non-health-care related activities.






32. The current traded rate for similar risk securities.






33. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






34. Gross proceeds less the underwriter's fee and other issuance fees.






35. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






36. 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.






37. (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.






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






39. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






40. 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.






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






42. Directly related to the purposes of the organization and the delivery of services






43. 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.






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






45. [Total Revenues/ Total Assets]






46. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






47. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






48. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






49. The degree to which standards are met.






50. 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.