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






2. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






3. Properties and equipment less accumulated depreciation.






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






5. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






6. The budget used to forecast operating expenses.






7. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






8. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






9. 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.






10. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






11. A good or service provided in return for some type of compensation.






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






13. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






14. 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






15. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






16. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






17. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






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






19. Costs that are traced to a cost object. See also Indirect costs and Cost object.






20. [(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






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






22. Expenses that have been incurred - but not yet paid.






23. The expenses incurred from an organization's operating activities.






24. Service center costs are allocated to both mission centers and other service centers






25. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






27. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






28. [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






29. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






30. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






32. An entity that gives capital to another entity in expectation of a financial or non-financial return.






33. Portion of the profits the organization keeps in-house to use in support of its mission.






34. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






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






36. 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






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






38. 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.






39. 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.






40. A security whose interest rate does not change during the lifetime of the bond.






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






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






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






44. Price times total quantity.






45. Directly related to the purposes of the organization and the delivery of services






46. Amounts due to the organization from patients - third parties - and others.






47. Return on investment. The percentage gain or loss experienced from an investment.






48. Stated interest rate on a bond - as promised by the issuer.






49. The income (operating revenues -operating expenses) earned in non-health-care related activities.






50. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.