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






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






3. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






4. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






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






6. 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.






7. 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






8. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






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






10. Revenues of the organization earned in non-healthcare related activities.






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






12. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






13. The section of the expense budget that forecasts salary and benefits.






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






15. Financial obligations that will be paid off over a time period longer than one year






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






17. 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.






18. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






20. 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.






21. 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.






22. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






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






24. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






25. 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.






26. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






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






29. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






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






31. 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.






32. Each service center






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






34. Series of payments over time - such as interest paid to bondholders.






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






36. [Total Revenues/ Total Assets]






37. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






38. 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






39. [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






40. (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;






41. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






42. Revenue is recorded when goods or services are delivered






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






44. Highly liquid current assets such as interest-bearing savings and checking accounts.






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






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






47. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






48. {current liabilities/[(total expenses






49. (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






50. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.