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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
.
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 cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Mail float
Financing mix
Collections policies and procedures
Book value
2. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Net accounts receivable
Market rate of interest
Financing activities
Coupon
3. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Non-regular cash flows
Decentralization
Income from investments
Billing float
4. Non-operating income.
Time value of money
Administrative profit centers
Compounding
Other income
5. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Line-item budget
Budget variance
Acid test ratio
Cash flows from financing activities
6. [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
Cash equivalents
Strategic decisions
Long Term Solvency ratios
Long-term debt to net assets ratio
7. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach
Top-down budgeting
Parent organization
Loan amortization schedule
Expense cost variance
8. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization
Long-term debt - net of current portion
Net Assets
Capital assets
Long-term financing
9. [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.
Other support
Current ratio
Revenues
Market rate of interest
10. 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.
Interest
IRR
Mutually exclusive projects
Market rate of interest
11. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Return on net assets
Billing float
Co-payments
Effectiveness
12. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Bond rating agency
Non-operating income
Total asset turnover
Activity Based Costing
13. Private entity or individual who makes a donation
Restricted donation
Program budget
Issuer
Donor
14. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Investor
Cash basis of accounting
Average payment period
15. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Mission Center
Temporarily restricted net assets
Long-term investments
Volume diversity
16. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net increase (decrease) in cash and cash equivalents
Activity ratios
Short-term financing
Net present value
17. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Footnotes
Effectiveness
Increase in unrestricted net assets
Administrative cost centers
18. 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.
Budget variance
Hedge
Service centers
Liabilities
19. process of measuring the resources (costs) used to produce results.
Cost Accounting
Net proceeds from a bond issuance
Restricted donation
Controlling activities
20. Directly related to the purposes of the organization and the delivery of services
Mission Center
Quick ratio
Other income
Performance budget
21. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Acid test ratio
Common costs
Non-current assets
Financing mix
22. Financial and non-financial standards against which organizational performance is measured.
Mission statement
Transaction
Accumulated depreciation
Performance measure
23. The amount of supplies used to provide a service or good.
Long-term debt to net assets ratio
Fixed asset turnover
Statement of changes in net assets
Cost of goods sold
24. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cash flows from financing activities
Cost centers
Bond rating agency
Fixed assets
25. Full-time equivalent employees. Two half-time employees equal one FTE.
Cash basis of accounting
Coupon
FTE
Spillover cash flows
26. 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.
Profit margin
Service centers
Comparative approach
Capital budget
27. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.
Ending inventory
Expense cost variance
Performance budget
Cost centers
28. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Direct costs
Return on net assets
Average Days Inventory
Cash basis of accounting
29. 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.
Lien
Bonds
Ending inventory
Net present value
30. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Fully allocated costs
Net patient service revenue
Current assets
Clinical cost centers
31. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
Coupon payment
Mail float
Net patient service revenue
Lender
32. The activities of an organization directly related to its main line of business.
Prepaid assets
Coupon payment
Tangible assets
Operating activities
33. Being subject to sanctions with respect to carrying out responsibilities.
Top-down/bottom-up approach
Base Budget
Accountability
Operating income
34. 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
Cash flows from investing activities
Investor
Ending inventory
35. Each service center
Coupon payment
Fully allocated costs
Operating budget
Single/Simple Step
36. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Perpetuity
Accrued expenses
Incremental cash flows
Total asset turnover
37. The elapsed time between financial statements. Common accounting periods
FV
Capital assets
Accounting period
Non-operating ratio
38. Price times total quantity.
Total revenue
Cost
Precautionary purposes
Cash flows from operating activities
39. 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
Return on net assets
Properties and equipment
Budget variance
Capital financing
40. Supplementing traditional sources of revenue with new sources.
Revenue enhancement
Other income
Basic accounting equation
Activity ratios
41. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Indirect costs
Liabilities
Dividends
Cost object
42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Restricted donation
Notes payable
Bonds
For-profit
43. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Fixed labor budget
Accrued expenses
Budget
Cash basis of accounting
44. The revenue and expense budgets of an organization.
Program budget
Long Term Solvency ratios
FV
Operating budget
45. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Investment centers
Non-operating income
Cost of capital
Responsibility center
46. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Capital
Non-operating income
Investment centers
Collateral
47. Irregular cash flows - typically occurring at the end of the life of a project.
Properties and equipment - net
Opportunity cost
Ending inventory
Non-regular cash flows
48. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Fully allocated costs
Statement of changes in net assets
Accounts payable
49. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.
HMO
Net working capital
Accrued expenses
Footnotes
50. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Cash flows from financing activities
Current assets
Average Days Inventory
Activity ratios