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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Financing activities
MV
Profitability ratios
Opportunity cost
2. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Mortgage bonds
Capital budget
ROI
Non-operating ratio
3. Financing that will be paid back in less than one year.
Expansion decisions
Average Days Receivable
Expenses
Short-term financing
4. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b
Contribution margin
Basis of Allocation
Other expenses
Profitability ratios
5. Debt to be paid off in a period longer than one year.
Accountability
Basis of Allocation
Long-term financing
Budget
6. Current assets. Net working capital equals current assets –current liabilities.
Collateral
Working capital
Mutually exclusive projects
Restricted donation
7. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Matching principle
Basis of Allocation
FTE
Assets
8. The revenue and expense budgets of an organization.
Top-down/bottom-up approach
Financing activities
Cash flows from financing activities
Operating budget
9. [(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
Working capital
Debt service coverage
Present value of an annuity
Program budget
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.
Payback
Collections policies and procedures
IRR
Indirect costs
11. 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.
Allowance for uncollectibles
Loan amortization schedule
Asset Management ratios
Capital structure decision
12. Service center costs are allocated to both mission centers and other service centers
Step Down
Annuity
Interest
Discount rate
13. Operating income not reported elsewhere under revenues - gains - and other support.
Performance budget
Temporarily restricted net assets
Lien
Other revenues
14. 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.
Common costs
Asset mix
Restricted donation
Centralization
15. The elapsed time between financial statements. Common accounting periods
Comparative approach
Not-for-profit
Accounting period
HMO
16. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Mail float
Budget
Investment centers
Tax-exempt bonds
17. [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?
Total asset turnover
Excess of revenues over expenses
Budget variance
Non-operating revenues
18. The budget used to forecast operating expenses.
Expense budget
Net present value
Budget variance
Bad debt
19. 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
Capital
Cash flows from investing activities
Net Assets
Lien
20. The percentage of each asset relative to total assets.
Increase in unrestricted net assets
Restricted donation
Total asset turnover
Asset mix
21. A budget in which line items are presented by program.
Program budget
Horizontal analysis
Other revenues
Statement of cash flows
22. [Net Accounts Receivable/(Revenue/356)]
Fixed costs
Properties and equipment - net
Average Days Receivable
Tangible assets
23. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Revenue enhancement
Incremental cash flows
Capital structure decision
24. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
Depreciation
Current liabilities
Mission statement
Current ratio
25. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Administrative profit centers
Operating margin
Direct costs
For-profit
26. 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
Ending inventory
Accrual basis of accounting
Debt to equity
Top-down budgeting
27. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Long-term debt - net of current portion
Clinical cost centers
Financing activities
Operating activities
28. 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
Tangible assets
IRR
Statement of operations
Fixed assets
29. Responsibility centers responsible for making a certain return on investments.
Quick ratio
Debt service coverage
Capital appreciation
Investment centers
30. Financing used expressly for the purchase of non-current assets.
Expansion decisions
Financing mix
Capital structure decision
Capital financing
31. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Parent organization
Non-current assets
Non-operating income
Balance sheet
32. The current traded rate for similar risk securities.
Common costs
Operating cash flows
Market rate of interest
Debt service coverage
33. [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.
Fixed asset turnover
Tax-exempt bonds
Revenue rate variance
Current ratio
34. Gross proceeds less the underwriter's fee and other issuance fees.
Net proceeds from a bond issuance
Spillover cash flows
Line of credit
Incremental cash flows
35. 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.
Total asset turnover
Billing float
Asset Turnover Ratio
Cash and cash equivalents
36. 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.
Ratio analysis
Long-term financing
Accounts payable
Average Days Receivable
37. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.
Balance sheet
Return on total assets
Total revenue
Operating cash flows
38. An investment that generates an annuity for an indefinite period of time - basically forever.
Perpetuity
Matching principle
Statement of changes in net assets
Capital financing
39. 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.
Long-term investments
Debt service coverage
Other expenses
Retained earnings
40. 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.
Service centers
Billing float
Ending inventory
Allocation base
41. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Billing - collections - and disbursement policies and procedures
Financing activities
Mortgage
Billing float
42. Directly related to the purposes of the organization and the delivery of services
Mission Center
Equity financing
Not-for-profit
Present value of an annuity
43. 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.
Market rate of interest
Line-item budget
Cost centers
Fully allocated costs
44. A note payable that has as collateral real assets and that requires periodic payments.
MV
FV
Breakeven point
Mortgage
45. [Total Revenues/ Total Assets]
Basis of Allocation
Asset Turnover Ratio
Average Days Receivable
Operating budget
46. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Activity ratios
Collateral
Step-down method
Amortization of a loan
47. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Capital investment decisions
Multiyear budget
Cost of capital
Bonds
48. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Expense volume variance
Ending inventory
Breakeven point
Accrual basis of accounting
49. The degree to which standards are met.
Effectiveness
Total asset turnover
Asset mix
Deferred revenues
50. 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.
Creditor
Cost
Operating cash flows
Hedge