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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
business-skills
,
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. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Leverage
Tangible assets
Fixed costs
2. Revenues of the organization earned in non-healthcare related activities.
Allocation base
Non-operating revenues
Perpetuity
Operating expenses
3. A method by which the organization develops its strategies and budgets to meet future financial targets.
Disbursement float
Non-operating revenues
IRR
Strategic financial planning
4. The elapsed time between financial statements. Common accounting periods
Final cost object
Dividends
Certainty
Accounting period
5. A security whose interest rate does not change during the lifetime of the bond.
Fixed (interest) rate debt
Revenue enhancement
Effectiveness
Basis of Allocation
6. Supplementing traditional sources of revenue with new sources.
Excess of revenues over expenses
Cash and cash equivalents
Revenue enhancement
Mortgage bonds
7. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Operating income
Quick ratio
Acid test ratio
Depreciation
8. A situation in which if one project is implemented the other(s) will not be.
Creditor
Non-regular cash flows
Service centers
Mutually exclusive projects
9. The difference between what was planned (budgeted) and what was achieved (actual).
Tax-exempt bonds
Profitability ratios
Budget variance
Profit margin
10. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Decentralization
Basic accounting equation
Equity financing
Time value of money
11. [(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
Times interest earned
Fully allocated costs
Market rate of interest
Inflation
12. Gross proceeds less the underwriter's fee and other issuance fees.
Allocation
Income from investments
Investment grade
Net proceeds from a bond issuance
13. Non-operating income.
Other income
Mission Center
Strategic planning
Operating activities
14. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Long-term debt to net assets ratio
Revenue rate variance
Donation
Interest
15. Directly related to the purposes of the organization and the delivery of services
Effectiveness
Mission Center
Acid test ratio
Activity Based Costing
16. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Float
Short-term financing
ABC
Spillover cash flows
17. The absence of risk in an investment.
Single/Simple Step
Revenue rate variance
Certainty
Activity ratios
18. Financial obligations that will be paid off over a time period longer than one year
Working capital
Non-current liabilities
Strategic planning
Accrued expenses
19. 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.
Discounted cash flows
Step-down method
Decentralization
Market rate of interest
20. The degree to which standards are met.
ABC
Effectiveness
Return on total assets
Equity financing
21. An investment that generates an annuity for an indefinite period of time - basically forever.
Net patient service revenue
Perpetuity
Coupon payment
Lien
22. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Accrued expenses
Basis of Allocation
Book value
Net increase (decrease) in cash and cash equivalents
23. The activities of an organization directly related to its main line of business.
Comparative approach
Cash budget
Operating activities
Current assets
24. Operating income not reported elsewhere under revenues - gains - and other support.
Long-term debt to net assets ratio
Non-operating income
Other revenues
Indirect costs
25. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Bond rating agency
Bad debt
Top-down budgeting
Investment centers
26. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Dividends
Financing mix
Effectiveness
Intermediate Cost Object
27. How an organization chooses to finance its working capital needs.
Beginning inventory
Incremental cash flows
Financing mix
Investment centers
28. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Asset mix
Assets
Tangible assets
Efficiency
29. Private entity or individual who makes a donation
Long-term financing
Average Days Inventory
Efficiency
Donor
30. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.
Net assets to total assets
Responsibility center
Bond rating
Allowance for uncollectibles
31. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Mission statement
Ratio analysis
Bad debt
Accumulated depreciation
32. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Ratio analysis
Donation
Spillover cash flows
33. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.
Lender
Permanently restricted net assets
Traditional profit centers
Billing float
34. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Horizontal analysis
Base Budget
Opening inventory
Properties and equipment - net
35. Portion of the profits the organization keeps in-house to use in support of its mission.
Ending inventory
Retained earnings
Asset Turnover Ratio
For-profit
36. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Average payment period
Expansion decisions
Activity Based Costing
Non-operating expenses
37. 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?
Statement of cash flows
Responsibility center
Operating margin
Step-down method
38. 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.
Line-item budget
Footnotes
IRR
Accrued expenses
39. The changes in cash resulting from the normal operating activities of the organization.
Return on net assets
Cash flows from operating activities
Equity financing
Properties and equipment - net
40. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Present value of an annuity
Non-operating income
Coupon
Discount rate
41. 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.
Product diversity
Coupon rate
Net Assets to Total Assets
Creditor
42. Financing used expressly for the purchase of non-current assets.
Direct costs
Float
Discounting
Capital financing
43. 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.
Prepaid assets
IRR
Accumulated depreciation
Breakeven point
44. Irregular cash flows - typically occurring at the end of the life of a project.
Horizontal analysis
Non-regular cash flows
Donor
Expansion decisions
45. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Mission Center
Financing activities
Present value of an annuity
Acid test ratio
46. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Operating revenues
Top-down/bottom-up approach
Increase in unrestricted net assets
Activity ratios
47. 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.
Net Assets
Increase in unrestricted net assets
IRR
Long-term debt - net of current portion
48. Service center costs are allocated to both mission centers and other service centers
Cost avoidance
Present value of an annuity
Step Down
Opening inventory
49. Amounts the organization is obligated to pay others - including suppliers and creditors.
Accounts payable
Times interest earned
Product diversity
Properties and equipment
50. The section of the expense budget that forecasts salary and benefits.
Revenues
Current ratio
Net accounts receivable
Fixed labor budget