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






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






3. 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.






4. 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.






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






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






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






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






9. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






11. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






12. [Total Revenues/ Total Assets]






13. The current traded rate for similar risk securities.






14. 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.






15. 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.






16. The revenue and expense budgets of an organization.






17. A security interest in one or more assets granted to lenders in a secured loan.






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






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






20. The total amount of multiyear debt due in future years.






21. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






22. 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.






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






24. {current liabilities/[(total expenses






25. Properties and equipment less accumulated depreciation.






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






27. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






28. [Total Liabilities/ Net assets]






29. (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






30. [(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






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






32. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






33. 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.






34. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






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






36. Amounts earned by the organization from the provision of service or sale of goods.






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






38. Responsibility centers responsible for making a certain return on investments.






39. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






40. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






41. [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?






42. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






43. The cost of activities that take place to produce the final cost object






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






45. 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.






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






47. The absence of risk in an investment.






48. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






49. The resources owned by the organization. It is one of the three major categories on the balance sheet.






50. 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).