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Test your basic knowledge |
ACCA Financial Management
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Study First
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. Being subject to sanctions with respect to carrying out responsibilities.
Revenues
Operating activities
Accountability
Net Assets
2. A security whose interest rate does not change during the lifetime of the bond.
Volume diversity
Other revenues
Fixed (interest) rate debt
G & A expenses
3. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Ending inventory
Parent organization
Mortgage bonds
Assets
4. Capital investment decisions designed to increase the operational capability of a health care organization.
Clinical cost centers
Expansion decisions
Realization principle
Decentralization
5. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.
Cost avoidance
Bond rating agency
Administrative profit centers
Net Assets
6. The total amount of multiyear debt due in future years.
Contribution margin
Average payment period
Long-term debt - net of current portion
Spillover cash flows
7. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Collateral
Capital appreciation
Administrative cost centers
Total asset turnover
8. A situation in which if one project is implemented the other(s) will not be.
Asset Management ratios
Mutually exclusive projects
Average Days Inventory
HMO
9. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Non-current assets
Other support
Depreciation
Revenue budget
10. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Not-for-profit
Amortization of a loan
Liquidity
Time value of money
11. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Coupon
Accounts payable
Basis of Allocation
Efficiency
12. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Net assets released from restriction
Expense volume variance
Discounted cash flows
Ratio analysis
13. 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.
Net increase (decrease) in cash and cash equivalents
Line-item budget
FV
Cost object
14. Debt to be paid off in a period longer than one year.
Long-term financing
Present value of an annuity
Product diversity
Statement of operations
15. 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.
Revenue rate variance
Revenues
Investor
Basic accounting equation
16. 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.
Footnotes
Current liabilities
Days cash on hand
Basis of Allocation
17. 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.
Bad debt
Cash flows from operating activities
Budget
Efficiency
18. Financing that will be paid back in less than one year.
Strategic decisions
Short-term financing
Capital appreciation
Expense budget
19. The ease and speed with which an asset can be turned into cash.
Liquidity
Cost object
Net present value
Discounted cash flows
20. A security interest in one or more assets granted to lenders in a secured loan.
Cash flows from investing activities
Periodic payments
Lien
Profit margin
21. Series of payments over time - such as interest paid to bondholders.
Operating activities
Periodic payments
Cash and cash equivalents
Other income
22. [(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
Expense volume variance
Fixed labor budget
Strategic decisions
Balance sheet
23. The amount of supplies used to provide a service or good.
Asset Turnover Ratio
Non-current assets
Cost of goods sold
Inflation
24. What a series of equal payments in the future is worth today taking into account the time value of money.
Present value of an annuity
Amortization of a loan
Accrual basis of accounting
Clinical cost centers
25. Assets = Liabilities + Net Assets (aka Equity).
Profit margin
Expansion decisions
Cash flows from financing activities
Basic accounting equation
26. Gross proceeds less the underwriter's fee and other issuance fees.
Net proceeds from a bond issuance
Net increase (decrease) in cash and cash equivalents
Performance measure
Line-item budget
27. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
HMO
Accrual basis of accounting
Allocation
Opportunity cost
28. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Tax-exempt bonds
Basic accounting equation
Capital financing
Capital budget
29. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Activity ratios
IRR
Cost object
30. Revenues of the organization earned in non-healthcare related activities.
Discounted cash flows
Administrative cost centers
Non-operating revenues
Capital structure ratios
31. The changes in cash resulting from the normal operating activities of the organization.
Coupon rate
Cash flows from operating activities
Intermediate Cost Object
G & A expenses
32. An entity that sells bonds in order to raise money.
Bad debt
Cost centers
For-profit
Issuer
33. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Temporarily restricted net assets
FV
Activity Based Costing
Other revenues
34. 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.
Revenues
Matching principle
Liabilities
Other revenues
35. The difference between current assets and current liabilities.
Amortization of a loan
Net working capital
Current assets
Beginning inventory
36. {[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).
Days cash on hand
Statement of cash flows
For-profit
Cash flows from financing activities
37. The absence of risk in an investment.
Administrative profit centers
Mission Center
Inflation
Certainty
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.
Intermediate Cost Object
Operating expenses
Capital budget
Time value of money
39. A note payable that has as collateral real assets and that requires periodic payments.
Administrative cost centers
Long-term financing
Equity financing
Mortgage
40. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Bad debt
Equity financing
Cash flows from financing activities
Comparative approach
41. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Capital appreciation
Revenue budget
Net increase (decrease) in cash and cash equivalents
Collateral
42. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Mortgage bonds
Other expenses
Long Term Solvency ratios
Other support
43. Capital investment decisions designed to increase an organization's strategic position.
Strategic decisions
Tangible assets
Other expenses
Short-term financing
44. Operating income not reported elsewhere under revenues - gains - and other support.
Other revenues
Restricted donation
Opening inventory
Cost of capital
45. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Permanently restricted net assets
Net increase (decrease) in cash and cash equivalents
Notes payable
Mortgage
46. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Lien
For-profit
Fixed costs
Cash budget
47. The increase in the value of an investment from the time it is purchased until the time it is sold.
Realization principle
Capital appreciation
Strategic decisions
Current liabilities
48. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Cash basis of accounting
Breakeven point
Investment grade
Co-payments
49. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Net assets released from restriction
Coupon payment
Acid test ratio
Cash and cash equivalents
50. The activities of an organization directly related to its main line of business.
Coupon
Parent organization
Operating activities
Short-term financing