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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Supplementing traditional sources of revenue with new sources.






2. The purchase of assets with contributed and internally generated funds. See also Debt financing.






3. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






4. The total amount of multiyear debt due in future years.






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






6. 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.






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






8. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






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






11. The amount of time between when an organization receives a service and pays for it.






12. Gross proceeds less the underwriter's fee and other issuance fees.






13. 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.






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






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






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






17. 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






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






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






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






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






22. Current assets. Net working capital equals current assets –current liabilities.






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






24. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






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






26. 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.






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






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






29. A situation in which if one project is implemented the other(s) will not be.






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






31. [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






32. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






33. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






35. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






36. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






37. [Surplus/Operating Revenues]






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






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






40. 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.






41. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






42. The percentage of each asset relative to total assets.






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






44. [(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






45. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






46. 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.






47. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






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






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






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







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