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






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






3. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






4. The degree of dispersion of responsibility within an organization. See also Centralization.






5. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






6. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






7. [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.






8. 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.






9. 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.






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






11. Assets = Liabilities + Net Assets (aka Equity).






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






13. The resources owned by the organization. It is one of the three major categories on the balance sheet.






14. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






15. 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.






16. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






17. The revenue and expense budgets of an organization.






18. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






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






20. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






21. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






22. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






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






24. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






25. 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.






26. [(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






27. Being subject to sanctions with respect to carrying out responsibilities.






28. [Total Liabilities/ Net assets]






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






30. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






31. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






32. Price times total quantity.






33. A transaction that reduces the risk of an investment.






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






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






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






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






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






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






40. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






42. Private entity or individual who makes a donation






43. Amounts the organization is obligated to pay others - including suppliers and creditors.






44. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






45. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






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






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






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






49. 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.






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







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