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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. 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)






2. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






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






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






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






6. The difference between what was planned (budgeted) and what was achieved (actual).






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






8. The changes in cash resulting from the normal operating activities of the organization.






9. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






10. 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






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






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






13. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






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






15. (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;






16. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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






18. A transaction that reduces the risk of an investment.






19. [Total Revenues/ Total Assets]






20. 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.






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






22. 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.






23. Debt to be paid off in a period longer than one year.






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






25. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






26. 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






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






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






29. An entity that owns other companies.






30. Revenues generated from an organization's operating activities.






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






32. 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.






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






34. Capital investment decisions designed to increase an organization's strategic position.






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






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






37. The revenue and expense budgets of an organization.






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






39. Proceeds lost by foregoing other opportunities.






40. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






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






42. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






43. The ease and speed with which an asset can be turned into cash.






44. 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?






45. 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.






46. The costs of a service after taking into account its direct and fair share of allocated costs.






47. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






48. The rise in an economy's general level of prices.






49. [Inventory/ (Cost of Goods Sold/365)]






50. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.