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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. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






2. (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






3. 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.






4. A legal obligation to pay the holder of the note or lien.






5. The absence of risk in an investment.






6. Donated assets that have restrictions on their use which will never be removed.






7. Literally non-movable assets. Generally used to refer to buildings and equipment.






8. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






9. Assets that have a physical presence.






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






11. [(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






12. [Total Revenues/ Total Assets]






13. An entity that owns other companies.






14. An assignment or grading of the likelihood that an organization will not default on a bond.






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






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






17. Private entity or individual who makes a donation






18. [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?






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






20. Assets = Liabilities + Net Assets (aka Equity).






21. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






22. 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?






23. [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).






24. 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.






25. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






27. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






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






29. A budget in which line items are presented by program.






30. 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






31. The elapsed time between financial statements. Common accounting periods






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






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






34. 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.






35. Ratios designed to answer the question: How profitable is the organization?






36. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






37. {current liabilities/[(total expenses






38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






40. 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.






41. 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.






42. 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.






43. The difference between current assets and current liabilities.






44. [Total Liabilities/ Net assets]






45. The cash flows derived from an organization's operating activities.






46. 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.






47. The degree to which standards are met.






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






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






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