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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. 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.






2. (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;






3. A note payable that has as collateral real assets and that requires periodic payments.






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






5. The current traded rate for similar risk securities.






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






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






8. The cost of activities that take place to produce the final cost object






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






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






11. 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






12. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






13. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






15. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






16. Current assets. Net working capital equals current assets –current liabilities.






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






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






19. 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.






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






21. [Total Revenues/ Total Assets]






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






23. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






24. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






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






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






27. Each service center






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






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






30. 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.






31. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






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






33. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






34. 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.






35. 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






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






37. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






38. 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






39. 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.






40. [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).






41. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






42. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






44. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






45. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






46. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






48. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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






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