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ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Collection float
Days cash on hand
Assets
Net increase (decrease) in cash and cash equivalents
2. 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.
Cash flows from financing activities
Billing float
Accrued expenses
Ratio analysis
3. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Precautionary purposes
Hedge
Lease
MV
4. 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.
Bonds
Accumulated depreciation
HMO
Mission statement
5. What a series of equal payments in the future is worth today taking into account the time value of money.
Notes payable
Present value of an annuity
Mutually exclusive projects
Dividends
6. 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.
Beginning inventory
Expenses
Lease
Final cost object
7. The increase in the value of an investment from the time it is purchased until the time it is sold.
Total asset turnover
Precautionary purposes
Present value of an annuity
Capital appreciation
8. 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.
Debt to equity
Net proceeds from a bond issuance
Cost
Net present value
9. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Traditional profit centers
Retained earnings
Clinical cost centers
Dividends
10. 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.
Footnotes
Service centers
Basis of Allocation
Operating margin
11. 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.
Issuer
Allocation base
Tax-exempt bonds
MV
12. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Cash flows from financing activities
FTE
Assets
Lien
13. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Allocation base
Fixed asset turnover
Debt to equity
Responsibility center
14. The cost of activities that take place to produce the final cost object
Cost centers
Revenue rate variance
Net working capital
Intermediate Cost Object
15. Each service center
Operating income
Single/Simple Step
Expansion decisions
Non-current assets
16. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.
Properties and equipment
Final cost object
Bonds
Fixed Asset Turnover
17. A method by which the organization develops its strategies and budgets to meet future financial targets.
Strategic financial planning
Coupon
Responsibility center
Loan amortization schedule
18. 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.
Mortgage bonds
Accumulated depreciation
Excess of revenues over expenses
Increase in unrestricted net assets
19. [(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
Fixed (interest) rate debt
Cash equivalents
Times interest earned
Liabilities
20. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Co-payments
HMO
Average payment period
Financing mix
21. Price times total quantity.
Amortization of a loan
Mortgage bonds
Total revenue
Current liabilities
22. Supplementing traditional sources of revenue with new sources.
Discount rate
Fixed (interest) rate debt
Revenue enhancement
Average Days Inventory
23. 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.
Financing mix
Activity Based Costing
Excess of revenues over expenses
Allowance for uncollectibles
24. Irregular cash flows - typically occurring at the end of the life of a project.
Non-regular cash flows
Bond rating agency
Cost of goods sold
Accrued expenses
25. 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
Effectiveness
Temporarily restricted net assets
Properties and equipment
Ratio analysis
26. Stated interest rate on a bond - as promised by the issuer.
Coupon rate
Statement of cash flows
Cost avoidance
Average Days Receivable
27. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.
Investment grade
Comparative approach
Fully allocated costs
Fixed Asset Turnover
28. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Clinical cost centers
Accrual basis of accounting
Capital appreciation
Capital investment decisions
29. [Total Liabilities/ Net assets]
Non-operating revenues
Intermediate Cost Object
Cash flows from operating activities
Debt to equity
30. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Financing mix
Intermediate Cost Object
Activity ratios
Capital structure decision
31. [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.
Coupon
Cost centers
Current ratio
G & A expenses
32. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Other revenues
Step Down
Acid test ratio
Efficiency
33. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.
Base Budget
Expense cost variance
Long-term financing
Payback
34. Capital investment decisions designed to increase an organization's strategic position.
Controlling activities
Strategic decisions
Indirect costs
Periodic payments
35. Series of payments over time - such as interest paid to bondholders.
Non-current liabilities
Fixed supplies budget
Non-current assets
Periodic payments
36. 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
ABC
Bad debt
Creditor
Short-term financing
37. 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
Cash basis of accounting
Long-term financing
Cash flows from investing activities
Statement of operations
38. Amounts due to the organization from patients - third parties - and others.
FTE
Present value of an annuity
Centralization
Accounts receivable
39. {current liabilities/[(total expenses
Average payment period
Responsibility center
Operating expenses
Strategic planning
40. The elapsed time between financial statements. Common accounting periods
Accountability
Capital
Book value
Accounting period
41. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.
Bond rating
Strategic planning
Liabilities
Beginning inventory
42. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Increase in unrestricted net assets
Coupon
Cost object
Accounting period
43. The idea that a dollar today is worth more than a dollar in the future.
Quick ratio
Deferred revenues
Time value of money
Cash flows from investing activities
44. 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.
Current liabilities
Fixed Asset Turnover
Cost
Step-down method
45. 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.
Budget
Acid test ratio
Dividends
IRR
46. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Revenue rate variance
Current ratio
Collections policies and procedures
Net proceeds from a bond issuance
47. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Profit margin
Permanently restricted net assets
Liquidity ratios
Other expenses
48. 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.
Cost avoidance
Net Assets to Total Assets
Indirect costs
Coupon rate
49. A security whose interest rate does not change during the lifetime of the bond.
Line of credit
Capital structure decision
Fixed (interest) rate debt
Controlling activities
50. 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.
Strategic planning
Revenue budget
FV
Cash and cash equivalents