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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. 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.






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






3. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






4. 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.






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






6. [Inventory/ (Cost of Goods Sold/365)]






7. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






8. The degree to which standards are met.






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






10. 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






11. The budget used to forecast operating expenses.






12. What a series of equal payments in the future is worth today taking into account the time value of money.






13. 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.






14. [Net Accounts Receivable/(Revenue/356)]






15. Properties and equipment less accumulated depreciation.






16. An entity that owns other companies.






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






18. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






19. The expenses incurred from an organization's operating activities.






20. Operating income not reported elsewhere under revenues - gains - and other support.






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






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






23. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






24. {current liabilities/[(total expenses






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






26. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






27. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






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






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






30. The difference between current assets and current liabilities.






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






32. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






33. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






34. 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






35. Gross proceeds less the underwriter's fee and other issuance fees.






36. [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






37. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






38. 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






39. The total amount of multiyear debt due in future years.






40. The purchase of assets with contributed and internally generated funds. See also Debt financing.






41. 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.






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






43. Previously restricted assets no longer restricted because the terms of the restriction have been met.






44. The rise in an economy's general level of prices.






45. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






46. Ratios that measure how efficiently an organization is using its assets to produce revenues.






47. 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.






48. [Total Revenues/ Total Assets]






49. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






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






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