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






2. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






3. 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.






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






5. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






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






7. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






8. 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).






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






10. 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.






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






12. The budget used to forecast operating expenses.






13. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






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






16. Properties and equipment less accumulated depreciation.






17. 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.






18. The degree to which standards are met.






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






20. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






21. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






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






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






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






26. Irregular cash flows - typically occurring at the end of the life of a project.






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






28. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






29. Budgets that typically cover two to five years.






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






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






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






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






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






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






36. Expenses of the organization incurred in non-health-care related activities.






37. [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).






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






39. [(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






40. The cash flows derived from an organization's operating activities.






41. Each service center






42. An entity that gives capital to another entity in expectation of a financial or non-financial return.






43. 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.






44. 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.






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






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






47. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






48. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






49. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






50. process of measuring the resources (costs) used to produce results.







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