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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. [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).






2. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






3. The activities of an organization directly related to its main line of business.






4. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






5. Operating income not reported elsewhere under revenues - gains - and other support.






6. 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).






7. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






8. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






9. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






10. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






11. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






12. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






13. 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






14. An entity that owns other companies.






15. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






16. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






17. [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).






18. The idea that a dollar today is worth more than a dollar in the future.






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






20. 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)






21. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






22. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






23. The degree of dispersion of responsibility within an organization. See also Centralization.






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






25. 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.






26. A note payable that has as collateral real assets and that requires periodic payments.






27. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






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






29. Capital investment decisions designed to increase the operational capability of a health care organization.






30. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






31. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






32. Assets that have a physical presence.






33. Proceeds lost by foregoing other opportunities.






34. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






35. A certificate attached to a bond representing the amount of interest to be paid to the holder.






36. 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?






37. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






38. Amounts the organization is obligated to pay others - including suppliers and creditors.






39. {current liabilities/[(total expenses






40. A method by which the organization develops its strategies and budgets to meet future financial targets.






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






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






43. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






44. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






46. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






47. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






48. The difference between current assets and current liabilities.






49. The degree to which standards are met.






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