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Test your basic knowledge |
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
.
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. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
For-profit
Decentralization
Long-term financing
Current liabilities
2. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Statement of operations
Opening inventory
Clinical cost centers
3. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Other income
Cash budget
Book value
Donor
4. Revenues generated from an organization's operating activities.
Operating revenues
Fixed costs
Coupon payment
Net Assets to Total Assets
5. Amounts earned by the organization from the provision of service or sale of goods.
Net assets to total assets
Footnotes
Annuity
Revenues
6. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Lease
Annuity
Capital assets
7. 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.
Bonds
Discounted cash flows
Capital structure decision
Cost centers
8. The revenue and expense budgets of an organization.
Net assets to total assets
Revenue enhancement
Times interest earned
Operating budget
9. Return on investment. The percentage gain or loss experienced from an investment.
Donor
ROI
Mail float
Non-operating income
10. 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.
Revenues
Mission statement
Cash flows from investing activities
Efficiency
11. Service center costs are allocated to both mission centers and other service centers
Step Down
Net working capital
Other revenues
Statement of cash flows
12. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Decentralization
Cash flows from investing activities
Discounting
Product diversity
13. 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.
Accrual basis of accounting
Bond rating
Hedge
Allowance for uncollectibles
14. Supplementing traditional sources of revenue with new sources.
Opening inventory
Revenue enhancement
Capital financing
Allocation
15. Highly liquid current assets such as interest-bearing savings and checking accounts.
Non-operating expenses
Statement of changes in net assets
Billing float
Cash equivalents
16. [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?
Line-item budget
Net working capital
Bonds
Total asset turnover
17. The current traded rate for similar risk securities.
Direct costs
Fixed Asset Turnover
Market rate of interest
Quick ratio
18. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Billing float
Equity financing
Lease
Operating income
19. A note payable that has as collateral real assets and that requires periodic payments.
FTE
Not-for-profit
Investment centers
Mortgage
20. 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
HMO
Return on total assets
Balance sheet
Clinical cost centers
21. Series of payments over time - such as interest paid to bondholders.
For-profit
Expansion decisions
Controlling activities
Periodic payments
22. Operating income not reported elsewhere under revenues - gains - and other support.
Other revenues
Net increase (decrease) in cash and cash equivalents
Compounding
Profit margin
23. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Compounding
Fixed assets
Capital structure ratios
Hedge
24. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Fixed assets
Market rate of interest
Income from investments
Current liabilities
25. [Total Liabilities/ Net assets]
Debt to equity
Capital appreciation
Line-item budget
Cash budget
26. Recording expenses associated with making revenue at the same time as revenues are recognized
Capital investment decisions
Matching principle
Ending inventory
Accounting period
27. 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.
Comparative approach
Prepaid assets
Step Down
Liquidity ratios
28. 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.
Average payment period
Billing float
Cash flows from financing activities
Net assets to total assets
29. 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.
MV
Fixed assets
Discount rate
Debt to equity
30. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Cost of capital
Discounted cash flows
Liquidity ratios
31. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Working capital
Efficiency
Other expenses
Cost of capital
32. The expenses incurred from an organization's operating activities.
Discounting
Fixed asset turnover
Basic accounting equation
Operating expenses
33. Financial obligations that will be paid off over a time period longer than one year
Non-current liabilities
Investment grade
Step-down method
Liquidity ratios
34. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Fixed supplies budget
Clinical cost centers
Investment centers
Debt service coverage
35. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Incremental cash flows
Bond rating
Bonds
Controlling activities
36. An entity that gives capital to another entity in expectation of a financial or non-financial return.
FV
Investor
Payback
Cost object
37. The section of the expense budget that forecasts salary and benefits.
Top-down budgeting
Fixed labor budget
Investment centers
Cash and cash equivalents
38. [Surplus/Operating Revenues]
Lien
Base Budget
Non-operating income
Profit margin
39. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Net proceeds from a bond issuance
Cash basis of accounting
Opportunity cost
Periodic payments
40. Literally non-movable assets. Generally used to refer to buildings and equipment.
Revenue enhancement
Fixed assets
Other support
Average Days Inventory
41. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Compounding
Cost object
Administrative profit centers
Other expenses
42. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Book value
Matching principle
Net Assets to Total Assets
Budget
43. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Current assets
Prepaid assets
Common costs
Opportunity cost
44. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor
ABC
Cash flows from financing activities
Payback
IRR
45. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Line of credit
Current assets
Expansion decisions
Footnotes
46. [(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.
Single/Simple Step
Compounding
Expense cost variance
Restricted donation
47. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Operating margin
Acid test ratio
Coupon rate
Top-down/bottom-up approach
48. What a series of equal payments in the future is worth today taking into account the time value of money.
Activity ratios
Present value of an annuity
Inflation
Current assets
49. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Co-payments
MV
Incremental cash flows
Lien
50. [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).
SWOT analysis
Net Assets
Direct costs
Fixed Asset Turnover