Test your basic knowledge |

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. Capital investment decisions designed to increase an organization's strategic position.






2. The ease and speed with which an asset can be turned into cash.






3. process of measuring the resources (costs) used to produce results.






4. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






5. (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






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






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






8. 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.






9. [Total Revenues/ Total Assets]






10. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






11. 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.






12. The revenue and expense budgets of an organization.






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






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






15. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






17. Revenue is recorded when goods or services are delivered






18. 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.






19. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






20. 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.






21. 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.






22. The purchase of assets with contributed and internally generated funds. See also Debt financing.






23. 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.






24. An entity that sells bonds in order to raise money.






25. Highly liquid current assets such as interest-bearing savings and checking accounts.






26. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






27. Return on investment. The percentage gain or loss experienced from an investment.






28. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






29. How an organization chooses to finance its working capital needs.






30. 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






31. 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.






32. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






33. What a series of equal payments in the future is worth today taking into account the time value of money.






34. Series of payments over time - such as interest paid to bondholders.






35. 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






36. The current traded rate for similar risk securities.






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






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






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






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






41. [Surplus/Operating Revenues]






42. Expenses that have been incurred - but not yet paid.






43. Full-time equivalent employees. Two half-time employees equal one FTE.






44. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






45. Price times total quantity.






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






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






48. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






50. Each service center