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






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






3. (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






4. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






5. Irregular cash flows - typically occurring at the end of the life of a project.






6. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






8. 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.






9. 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.






10. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






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






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






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






14. [Surplus/Operating Revenues]






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






16. The total amount of multiyear debt due in future years.






17. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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






19. The current traded rate for similar risk securities.






20. 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.






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






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






23. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






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






25. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






26. The cost of activities that take place to produce the final cost object






27. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






28. Costs that are traced to a cost object. See also Indirect costs and Cost object.






29. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






30. [Total assets/Net Assets]






31. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






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






34. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






35. 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.






36. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






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






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






40. 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.






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






42. 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.






43. [(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






44. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






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






47. 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.






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






49. 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.






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