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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. [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).






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






3. 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.






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






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






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






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






8. 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.






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






10. The difference between current assets and current liabilities.






11. The amount of supplies used to provide a service or good.






12. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






13. Amounts earned by the organization from the provision of service or sale of goods.






14. 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)






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






16. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






17. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






19. 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.






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






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






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






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






24. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






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






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






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






28. An entity that is owed money for lending funds or supplying goods or services on credit.






29. An investment that generates an annuity for an indefinite period of time - basically forever.






30. 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.






31. Literally non-movable assets. Generally used to refer to buildings and equipment.






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






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






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






35. Supplementing traditional sources of revenue with new sources.






36. The budget used to forecast operating expenses.






37. {current liabilities/[(total expenses






38. [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.






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






40. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






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






42. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






43. A legal obligation to pay the holder of the note or lien.






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






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






46. 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






47. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






48. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






49. The increase in the value of an investment from the time it is purchased until the time it is sold.






50. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b