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Test your basic knowledge |
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. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Cost of capital
Beginning inventory
Net assets to total assets
Retained earnings
2. 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
Indirect costs
Controlling activities
Statement of operations
Capital assets
3. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Ending inventory
Controlling activities
Investment centers
Amortization of a loan
4. An entity that sells bonds in order to raise money.
Fixed supplies budget
Average payment period
Issuer
Top-down/bottom-up approach
5. The degree to which standards are met.
Investment grade
Contribution margin
Effectiveness
Product diversity
6. The activities of an organization directly related to its main line of business.
Revenue enhancement
Prepaid assets
Cost Accounting
Operating activities
7. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Cash flows from financing activities
Net Assets to Total Assets
Net Assets
8. 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.
Line of credit
Cost centers
Cash flows from investing activities
Mission Center
9. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Discounting
Capital
Long Term Solvency ratios
FV
10. Gross proceeds less the underwriter's fee and other issuance fees.
Basis of Allocation
Net proceeds from a bond issuance
Fully allocated costs
Net assets to total assets
11. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
HMO
Profitability ratios
Fixed supplies budget
Return on total assets
12. Being subject to sanctions with respect to carrying out responsibilities.
ABC
Accountability
Allocation base
Retained earnings
13. 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.
Horizontal analysis
Cost centers
Market rate of interest
Step-down method
14. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Collections policies and procedures
Precautionary purposes
Excess of revenues over expenses
Capital budget
15. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.
Efficiency
Performance budget
Mutually exclusive projects
Coupon rate
16. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Liquidity ratios
Capital
Excess of revenues over expenses
Bond rating agency
17. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Multiyear budget
Increase in unrestricted net assets
Quick ratio
18. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Fixed supplies budget
Precautionary purposes
Realization principle
Efficiency
19. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Co-payments
Line-item budget
Revenue rate variance
Capital financing
20. The absence of risk in an investment.
Cash flows from financing activities
Certainty
G & A expenses
Net accounts receivable
21. The current traded rate for similar risk securities.
Expense cost variance
Quick ratio
Market rate of interest
Responsibility center
22. Supplementing traditional sources of revenue with new sources.
Matching principle
Collateral
Revenue enhancement
Accountability
23. [(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
Lien
Debt service coverage
For-profit
Coupon
24. [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?
Horizontal analysis
Fixed supplies budget
Total asset turnover
Mission Center
25. 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
Equity financing
Not-for-profit
Performance measure
Operating margin
26. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Lease
Restricted donation
Strategic financial planning
HMO
27. An organization's financial obligations that are to be paid within one year.
Current liabilities
Net assets released from restriction
Single/Simple Step
Liquidity
28. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Operating expenses
Common costs
Budget variance
Other support
29. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Statement of cash flows
Asset Management ratios
Volume diversity
Ending inventory
30. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Strategic decisions
Cash basis of accounting
Dividends
Net increase (decrease) in cash and cash equivalents
31. The amount of supplies used to provide a service or good.
Revenues
Clinical cost centers
Cost of goods sold
Fixed Asset Turnover
32. The revenue and expense budgets of an organization.
Operating budget
Revenue rate variance
Performance budget
Statement of operations
33. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Bonds
Budget variance
Total revenue
Allocation
34. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Top-down/bottom-up approach
Coupon payment
Controlling activities
Notes payable
35. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Spillover cash flows
Revenues
Not-for-profit
36. Directly related to the purposes of the organization and the delivery of services
Mission Center
Incremental cash flows
Net assets released from restriction
Accrued expenses
37. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.
Footnotes
Collateral
IRR
Days cash on hand
38. Demonstrates the ability to pay off long term debt
Intermediate Cost Object
Discounting
Long Term Solvency ratios
Compounding
39. 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.
Cash equivalents
Ratio analysis
Long-term investments
Cash basis of accounting
40. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Retained earnings
Cost object
Accounts receivable
Cash flows from operating activities
41. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Accounts receivable
Collections policies and procedures
Asset Management ratios
Common costs
42. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Net patient service revenue
Lien
Footnotes
Collections policies and procedures
43. The amount of time between when an organization receives a service and pays for it.
Operating income
Volume diversity
Disbursement float
Net working capital
44. Assets = Liabilities + Net Assets (aka Equity).
Net proceeds from a bond issuance
Net increase (decrease) in cash and cash equivalents
Basic accounting equation
Loan amortization schedule
45. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Non-operating income
Horizontal analysis
Non-regular cash flows
Strategic planning
46. 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
Transaction
Properties and equipment
G & A expenses
Mission Center
47. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Perpetuity
Capital structure ratios
Opening inventory
Common costs
48. Revenues of the organization earned in non-healthcare related activities.
Issuer
Non-operating revenues
Fixed supplies budget
Long-term debt to net assets ratio
49. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Accrued expenses
Annuity
Activity Based Costing
Top-down budgeting
50. The cost of activities that take place to produce the final cost object
Donation
Opening inventory
Net accounts receivable
Intermediate Cost Object