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






2. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






3. 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.






4. 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.






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






6. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






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






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






9. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






10. The absence of risk in an investment.






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






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






13. (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






14. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






15. Demonstrates the ability to pay off long term debt






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






17. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






18. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






19. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






20. Current assets. Net working capital equals current assets –current liabilities.






21. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






23. An investment that generates an annuity for an indefinite period of time - basically forever.






24. 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.






25. 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.






26. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






27. 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).






28. Directly related to the purposes of the organization and the delivery of services






29. [Net Accounts Receivable/(Revenue/356)]






30. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






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






32. Operating income not reported elsewhere under revenues - gains - and other support.






33. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






34. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






35. {current liabilities/[(total expenses






36. 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.






37. Budgets that typically cover two to five years.






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






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






40. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






42. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






43. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






45. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






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






47. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






48. 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.






49. 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.






50. 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