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ACCA Financial Management
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certifications
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
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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 system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Cash basis of accounting
Collateral
Investment centers
Long Term Solvency ratios
2. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Net assets released from restriction
Non-operating ratio
Clinical cost centers
Basis of Allocation
3. Supplementing traditional sources of revenue with new sources.
Capital investment decisions
ABC
Revenue enhancement
Top-down/bottom-up approach
4. 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
Current liabilities
Operating margin
IRR
ABC
5. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Billing float
HMO
Expenses
Notes payable
6. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?
Present value of an annuity
Financing mix
Operating budget
Total asset turnover
7. The increase in the value of an investment from the time it is purchased until the time it is sold.
Equity financing
Capital appreciation
Financing activities
Indirect costs
8. The activities of an organization directly related to its main line of business.
Operating activities
Discounting
Product diversity
Bad debt
9. A security interest in one or more assets granted to lenders in a secured loan.
Profit margin
Non-current assets
SWOT analysis
Lien
10. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Coupon
Statement of changes in net assets
Long-term financing
Properties and equipment
11. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Compounding
Allocation
Incremental cash flows
Accountability
12. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Controlling activities
Equity financing
Investor
Budget variance
13. The section of the expense budget that forecasts salary and benefits.
Market rate of interest
Fixed labor budget
Co-payments
Loan amortization schedule
14. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Inflation
Revenues
Net patient service revenue
Fixed Asset Turnover
15. How an organization chooses to finance its working capital needs.
Financing mix
Accrued expenses
Mail float
Cost of capital
16. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Liquidity ratios
Coupon payment
Issuer
17. The cash flows derived from an organization's operating activities.
Expansion decisions
Capital financing
Expense volume variance
Operating cash flows
18. {[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).
Final cost object
Days cash on hand
Discounting
Retained earnings
19. 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.
Top-down budgeting
Incremental cash flows
Ratio analysis
Notes payable
20. 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.
Equity financing
Financing activities
Payback
Long Term Solvency ratios
21. The amount of supplies used to provide a service or good.
Long Term Solvency ratios
Capital investment decisions
Cost of goods sold
Non-operating ratio
22. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Cost
Performance budget
Cost of goods sold
Capital investment decisions
23. The difference between what was planned (budgeted) and what was achieved (actual).
Budget variance
Expense budget
Bond rating
Controlling activities
24. Each service center
Incremental cash flows
Periodic payments
Fixed asset turnover
Single/Simple Step
25. 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.
Cash flows from operating activities
Horizontal analysis
Product diversity
Cash and cash equivalents
26. The degree to which standards are met.
Effectiveness
Common costs
Increase in unrestricted net assets
FV
27. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Cash flows from financing activities
Step-down method
Revenues
Coupon payment
28. Ratios designed to answer the question: How profitable is the organization?
MV
Investment grade
Coupon
Profitability ratios
29. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Discounted cash flows
Direct costs
Amortization of a loan
Co-payments
30. The amount of time between when an organization receives a service and pays for it.
Disbursement float
Long-term debt - net of current portion
Cash budget
Depreciation
31. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
G & A expenses
Financing activities
Budget variance
Other income
32. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Revenue budget
Indirect costs
Temporarily restricted net assets
Bond rating
33. The cost of activities that take place to produce the final cost object
Capital appreciation
Accrued expenses
Intermediate Cost Object
Accrual basis of accounting
34. Service center costs are allocated to both mission centers and other service centers
Precautionary purposes
Operating budget
Mortgage bonds
Step Down
35. 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.
Mutually exclusive projects
ABC
Net accounts receivable
Allocation base
36. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Bad debt
Mission statement
Revenue budget
Investor
37. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Strategic planning
Centralization
Profitability ratios
Operating income
38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Liquidity ratios
Equity financing
Long-term financing
Final cost object
39. [(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
Traditional profit centers
Net proceeds from a bond issuance
Expense volume variance
Investment grade
40. Amounts due to the organization from patients - third parties - and others.
Fixed asset turnover
Annuity
Accounts receivable
Debt service coverage
41. Revenues generated from an organization's operating activities.
Operating revenues
Spillover cash flows
Non-operating ratio
HMO
42. The ease and speed with which an asset can be turned into cash.
Net working capital
Bond rating agency
Liquidity
Cost avoidance
43. A transaction that reduces the risk of an investment.
Compounding
Capital appreciation
Mutually exclusive projects
Hedge
44. An organization's financial obligations that are to be paid within one year.
Expense volume variance
Opening inventory
Current liabilities
Issuer
45. Irregular cash flows - typically occurring at the end of the life of a project.
Accumulated depreciation
HMO
Non-regular cash flows
Creditor
46. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.
Budget variance
Accountability
Cost object
Cost
47. Gross proceeds less the underwriter's fee and other issuance fees.
Net proceeds from a bond issuance
Cost of goods sold
Tax-exempt bonds
Service centers
48. [Total assets/Net Assets]
Performance budget
Leverage
Cash basis of accounting
IRR
49. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Non-operating ratio
Collection float
Top-down budgeting
Expense budget
50. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Collections policies and procedures
Short-term financing
Cost object
For-profit
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