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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.
  • 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 a capital asset (i.e. building or equipment) minus accumulated depreciation.






2. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






3. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






4. Non-operating income.






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






6. [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






7. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






8. 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






9. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






10. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






11. (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;






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






13. Private entity or individual who makes a donation






14. Series of payments over time - such as interest paid to bondholders.






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






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






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






18. 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.






19. process of measuring the resources (costs) used to produce results.






20. Directly related to the purposes of the organization and the delivery of services






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






22. Financial and non-financial standards against which organizational performance is measured.






23. The amount of supplies used to provide a service or good.






24. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






25. Full-time equivalent employees. Two half-time employees equal one FTE.






26. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






27. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






28. Costs that are traced to a cost object. See also Indirect costs and Cost object.






29. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






30. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






31. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






32. The activities of an organization directly related to its main line of business.






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






34. 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






35. Each service center






36. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






37. The elapsed time between financial statements. Common accounting periods






38. Price times total quantity.






39. 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






40. Supplementing traditional sources of revenue with new sources.






41. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






44. The revenue and expense budgets of an organization.






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






46. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






47. Irregular cash flows - typically occurring at the end of the life of a project.






48. Properties and equipment less accumulated depreciation.






49. 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.






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