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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
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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. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Volume diversity
Notes payable
Increase in unrestricted net assets
2. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Average payment period
Mission statement
Co-payments
Donor
3. 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.
Balance sheet
Accrual basis of accounting
Capital appreciation
For-profit
4. The expenses incurred from an organization's operating activities.
Mission Center
Operating expenses
Multiyear budget
Traditional profit centers
5. How an organization chooses to finance its working capital needs.
Discounting
Financing mix
Top-down/bottom-up approach
Net assets to total assets
6. The section of the expense budget that forecasts salary and benefits.
Fixed labor budget
Operating activities
Bond rating agency
Cost avoidance
7. 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.
Cost object
Temporarily restricted net assets
Lease
Accountability
8. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Liquidity ratios
Accountability
Net assets released from restriction
9. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Times interest earned
SWOT analysis
Cash flows from operating activities
Non-operating income
10. Revenues of the organization earned in non-healthcare related activities.
Long-term debt - net of current portion
Non-operating revenues
Investment centers
Float
11. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Donor
Net present value
Beginning inventory
Transaction
12. 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.
Fixed asset turnover
Market rate of interest
Performance budget
Bond rating
13. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Cost Accounting
Fixed labor budget
Coupon payment
Fixed asset turnover
14. An entity that sells bonds in order to raise money.
Mail float
Issuer
Efficiency
Excess of revenues over expenses
15. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Collection float
Breakeven point
Basis of Allocation
16. The ease and speed with which an asset can be turned into cash.
For-profit
Other expenses
Liquidity
Operating expenses
17. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Temporarily restricted net assets
Revenue rate variance
HMO
Bad debt
18. (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
Tax-exempt bonds
Final cost object
Days cash on hand
Volume diversity
19. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Capital financing
Investment centers
Operating activities
Comparative approach
20. 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.
Capital appreciation
Administrative profit centers
Net Assets
Top-down/bottom-up approach
21. 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.
Payback
Investment grade
FTE
Financing activities
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.
Debt service coverage
Accumulated depreciation
Expense budget
Cash flows from investing activities
23. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Properties and equipment
Excess of revenues over expenses
Cash basis of accounting
Capital investment decisions
24. The idea that a dollar today is worth more than a dollar in the future.
Coupon
Performance budget
Current liabilities
Time value of money
25. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Budget
Mail float
Non-operating ratio
Cash flows from financing activities
26. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Capital investment decisions
FTE
Volume diversity
Bond rating agency
27. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Lien
Cash equivalents
Long-term investments
Volume diversity
28. Expenses of the organization incurred in non-health-care related activities.
Cost centers
Statement of changes in net assets
Mission Center
Non-operating expenses
29. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Operating expenses
Base Budget
Accumulated depreciation
Line of credit
30. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Discounting
Balance sheet
Operating activities
Billing - collections - and disbursement policies and procedures
31. The cost of activities that take place to produce the final cost object
Cost Accounting
Budget
Intermediate Cost Object
Depreciation
32. [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).
Non-operating expenses
Net assets to total assets
Discounting
Operating activities
33. The rise in an economy's general level of prices.
Mortgage bonds
Inflation
Traditional profit centers
Financing mix
34. The difference between current assets and current liabilities.
FTE
Certainty
Other support
Net working capital
35. Proceeds lost by foregoing other opportunities.
Total revenue
Opportunity cost
Strategic financial planning
Excess of revenues over expenses
36. A note payable that has as collateral real assets and that requires periodic payments.
Mortgage
Performance measure
Prepaid assets
Present value of an annuity
37. An assignment or grading of the likelihood that an organization will not default on a bond.
Footnotes
Cost Accounting
Bond rating
Billing float
38. 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.
Discount rate
Tangible assets
Expenses
Performance budget
39. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
Depreciation
Capital appreciation
Cost Accounting
Long-term investments
40. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Annuity
Capital
Quick ratio
Cost
41. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo
Annuity
Expansion decisions
Net Assets
Long-term debt to net assets ratio
42. The cost of the supplies on hand at the beginning of the year.
Opening inventory
ROI
Performance budget
Single/Simple Step
43. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Final cost object
Service centers
Net increase (decrease) in cash and cash equivalents
Statement of operations
44. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Capital
Cash flows from financing activities
Service centers
Opportunity cost
45. Financial obligations that will be paid off over a time period longer than one year
Allowance for uncollectibles
Activity ratios
Non-current liabilities
Statement of operations
46. Revenue is recorded when goods or services are delivered
Annuity
Amortization of a loan
Non-operating ratio
Realization principle
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.
Other revenues
For-profit
Statement of cash flows
IRR
48. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Excess of revenues over expenses
Controlling activities
FTE
Temporarily restricted net assets
49. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Efficiency
Line-item budget
Notes payable
Debt to equity
50. The elapsed time between financial statements. Common accounting periods
Accounting period
Efficiency
Net present value
Parent organization