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ACCA Financial Management

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 activities that take place to produce the final cost object






2. 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.






3. 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.






4. An organization's financial obligations that are to be paid within one year.






5. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






6. Capital investment decisions designed to increase the operational capability of a health care organization.






7. [Total assets/Net Assets]






8. 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.






9. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






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






11. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






12. Ratios designed to answer the question: How profitable is the organization?






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






14. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






15. 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.






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






17. A good or service provided in return for some type of compensation.






18. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






19. Financing that will be paid back in less than one year.






20. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






21. 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






22. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






23. 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.






24. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






25. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






26. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






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






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






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






30. 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?






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






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






33. [(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






34. 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.






35. 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.






36. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






37. Expenses of the organization incurred in non-health-care related activities.






38. Capital investment decisions designed to increase an organization's strategic position.






39. An entity that is owed money for lending funds or supplying goods or services on credit.






40. Budgets that typically cover two to five years.






41. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






42. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






43. Literally non-movable assets. Generally used to refer to buildings and equipment.






44. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






45. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






46. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






47. {[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).






48. 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.






49. 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.






50. An assignment or grading of the likelihood that an organization will not default on a bond.