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






2. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






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).






4. A good or service provided in return for some type of compensation.






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






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.






7. The degree to which standards are met.






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






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.






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






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






12. [Inventory/ (Cost of Goods Sold/365)]






13. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






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






17. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






18. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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.






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






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.






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.






23. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






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






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.






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.






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.






28. An entity that gives capital to another entity in expectation of a financial or non-financial return.






29. Portion of the profits the organization keeps in-house to use in support of its mission.






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.






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).






32. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






33. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






34. Budgets that typically cover two to five years.






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.






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.






37. The section of the expense budget that forecasts salary and benefits.






38. The activities of an organization directly related to its main line of business.






39. The amount of time between when an organization receives a service and pays for it.






40. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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.






42. Previously restricted assets no longer restricted because the terms of the restriction have been met.






43. The idea that a dollar today is worth more than a dollar in the future.






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






45. The amount of supplies used to provide a service or good.






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;






47. Recording expenses associated with making revenue at the same time as revenues are recognized






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






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?






50. A security interest in one or more assets granted to lenders in a secured loan.