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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. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Centralization
Average Days Receivable
Interest
2. 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.
Payback
Co-payments
Permanently restricted net assets
Investment centers
3. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Cost centers
Billing - collections - and disbursement policies and procedures
Equity financing
Statement of cash flows
4. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Efficiency
Operating margin
Strategic decisions
Discount rate
5. 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.
Operating income
Controlling activities
Mission statement
Revenue rate variance
6. Proceeds lost by foregoing other opportunities.
Cost object
Opportunity cost
Clinical cost centers
Liabilities
7. 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
Other income
Net Assets
Fixed assets
Depreciation
8. The idea that a dollar today is worth more than a dollar in the future.
Other expenses
Effectiveness
Line of credit
Time value of money
9. Gross proceeds less the underwriter's fee and other issuance fees.
Deferred revenues
Cost of capital
Net proceeds from a bond issuance
Days cash on hand
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
Billing - collections - and disbursement policies and procedures
Cost of capital
Cash budget
Long-term debt to net assets ratio
11. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Other support
Allowance for uncollectibles
Current liabilities
Long Term Solvency ratios
12. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Days cash on hand
Step-down method
Mortgage
13. [Total Liabilities/ Net assets]
Present value of an annuity
Debt to equity
Mortgage
Notes payable
14. 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.
Ratio analysis
Average Days Receivable
Incremental cash flows
Statement of changes in net assets
15. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Fixed costs
Cost object
Bad debt
Mortgage
16. The current traded rate for similar risk securities.
Market rate of interest
Long-term investments
Non-current liabilities
Restricted donation
17. 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
Fixed assets
Long-term investments
Statement of operations
Footnotes
18. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Mission statement
Lender
Single/Simple Step
Accounts receivable
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.
Accounts receivable
MV
Discounted cash flows
Notes payable
20. Each service center
Spillover cash flows
Single/Simple Step
Net proceeds from a bond issuance
Expenses
21. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Cash basis of accounting
Cost avoidance
Accrual basis of accounting
FTE
22. An investment that generates an annuity for an indefinite period of time - basically forever.
Time value of money
Perpetuity
Cost Accounting
Other income
23. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Billing - collections - and disbursement policies and procedures
Parent organization
Cost avoidance
Strategic planning
24. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Total revenue
Book value
Donor
Line of credit
25. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Other income
Collateral
Coupon
Mortgage bonds
26. 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
Fixed assets
Time value of money
Investment centers
27. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Fully allocated costs
Net increase (decrease) in cash and cash equivalents
Contribution margin
Income from investments
28. [(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.
Expense cost variance
Budget
Transaction
Capital structure decision
29. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Realization principle
Net proceeds from a bond issuance
Cash flows from operating activities
Excess of revenues over expenses
30. An organization's financial obligations that are to be paid within one year.
Cash basis of accounting
Opening inventory
Return on total assets
Current liabilities
31. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to
Properties and equipment
Allowance for uncollectibles
Cash and cash equivalents
Average Days Receivable
32. 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.
Average Days Receivable
Cash flows from investing activities
IRR
Billing float
33. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
SWOT analysis
Net Assets
Operating income
Final cost object
34. A method by which the organization develops its strategies and budgets to meet future financial targets.
Operating revenues
SWOT analysis
Strategic financial planning
Restricted donation
35. 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).
Cost of capital
Interest
Breakeven point
Accrued expenses
36. 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.
Other income
Long-term investments
IRR
Dividends
37. Expenses of the organization incurred in non-health-care related activities.
Budget variance
Comparative approach
Non-operating expenses
Decentralization
38. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Net working capital
Incremental cash flows
Allocation
Working capital
39. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
Step-down method
Allowance for uncollectibles
Opportunity cost
SWOT analysis
40. 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
ABC
Times interest earned
Common costs
Precautionary purposes
41. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Fixed costs
Amortization of a loan
Depreciation
42. Demonstrates the ability to pay off long term debt
Loan amortization schedule
Discounting
Long Term Solvency ratios
Deferred revenues
43. Revenue is recorded when goods or services are delivered
Lender
Market rate of interest
Accounting period
Realization principle
44. Debt to be paid off in a period longer than one year.
Operating cash flows
Step Down
Long-term financing
Other support
45. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Expansion decisions
Line of credit
Non-operating income
Net assets released from restriction
46. (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
Other support
FTE
Tax-exempt bonds
Strategic planning
47. Amounts earned by the organization from the provision of service or sale of goods.
Revenues
Long-term debt to net assets ratio
Revenue enhancement
Capital financing
48. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Strategic financial planning
Dividends
Activity ratios
Top-down budgeting
49. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Amortization of a loan
Operating budget
Statement of cash flows
Not-for-profit
50. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Non-operating expenses
Efficiency
Expense volume variance
Lender