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Test your basic knowledge |
ACCA Financial Management
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Study First
Subjects
:
certifications
,
business-skills
,
acca
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. 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.
Strategic decisions
Net assets released from restriction
Mission statement
Liabilities
2. How an organization chooses to finance its working capital needs.
Financing mix
For-profit
Loan amortization schedule
Depreciation
3. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).
Current liabilities
Cost of capital
Not-for-profit
Deferred revenues
4. Assets that have a physical presence.
Depreciation
Tangible assets
Billing - collections - and disbursement policies and procedures
Asset Turnover Ratio
5. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Single/Simple Step
Other expenses
Multiyear budget
Not-for-profit
6. Amounts due to the organization from patients - third parties - and others.
Accounts receivable
Income from investments
Allowance for uncollectibles
Base Budget
7. Financial obligations that will be paid off over a time period longer than one year
Non-operating expenses
Program budget
Non-current liabilities
Cash budget
8. 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.
Properties and equipment - net
Discount rate
IRR
Capital investment decisions
9. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Book value
Amortization of a loan
Revenue budget
Coupon
10. The ease and speed with which an asset can be turned into cash.
Notes payable
FTE
Administrative cost centers
Liquidity
11. Each service center
Realization principle
Single/Simple Step
Expense cost variance
Financing activities
12. Highly liquid current assets such as interest-bearing savings and checking accounts.
Capital investment decisions
Long-term financing
Allocation
Cash equivalents
13. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Cost of capital
Effectiveness
Debt service coverage
Fixed assets
14. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
G & A expenses
Cost of capital
FV
Revenue enhancement
15. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Retained earnings
Coupon rate
Step Down
16. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Fixed costs
Long Term Solvency ratios
Coupon rate
Restricted donation
17. Private entity or individual who makes a donation
Donor
Asset Management ratios
Ratio analysis
Capital assets
18. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Expansion decisions
Average payment period
Equity financing
Cash and cash equivalents
19. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
IRR
Coupon rate
Net assets to total assets
Cost centers
20. [(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
Expense volume variance
Prepaid assets
Direct costs
Horizontal analysis
21. [Inventory/ (Cost of Goods Sold/365)]
Tax-exempt bonds
Strategic decisions
Non-current assets
Average Days Inventory
22. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Performance measure
Asset Management ratios
Float
Assets
23. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.
Tax-exempt bonds
Accounts payable
Budget variance
Capital assets
24. The difference between what was planned (budgeted) and what was achieved (actual).
Capital structure ratios
Budget variance
IRR
Investment centers
25. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Non-operating ratio
Hedge
Compounding
Investment grade
26. 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.
Revenue rate variance
Financing activities
Asset mix
Coupon
27. {[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).
Permanently restricted net assets
Days cash on hand
Net working capital
Billing float
28. 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
Responsibility center
Cash and cash equivalents
Long-term debt - net of current portion
Contribution margin
29. (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.
Return on total assets
Non-current assets
Product diversity
HMO
30. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Clinical cost centers
Lease
Responsibility center
Footnotes
31. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Operating expenses
Creditor
Spillover cash flows
Revenues
32. {current liabilities/[(total expenses
Bond rating
Line-item budget
Average payment period
Tangible assets
33. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Other support
FV
Basic accounting equation
Fixed assets
34. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Breakeven point
Interest
Comparative approach
35. 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
Billing - collections - and disbursement policies and procedures
Revenue budget
Properties and equipment
Debt to equity
36. 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
Current liabilities
Loan amortization schedule
Direct costs
37. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Retained earnings
Net increase (decrease) in cash and cash equivalents
Operating cash flows
Cash flows from financing activities
38. 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.
Ending inventory
Payback
Total asset turnover
Time value of money
39. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Opportunity cost
Interest
Average Days Receivable
Debt service coverage
40. A legal obligation to pay the holder of the note or lien.
Revenue budget
Notes payable
Capital financing
Properties and equipment
41. Financing used expressly for the purchase of non-current assets.
Cash basis of accounting
Non-current assets
Collection float
Capital financing
42. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Net Assets to Total Assets
Coupon
Cost
Multiyear budget
43. 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.
Ending inventory
Bad debt
Average Days Receivable
Net assets released from restriction
44. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Horizontal analysis
Activity ratios
G & A expenses
Asset Management ratios
45. An organization's financial obligations that are to be paid within one year.
Current liabilities
Average Days Receivable
Investment grade
Accountability
46. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Long-term financing
Traditional profit centers
Realization principle
Capital financing
47. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Quick ratio
Other expenses
Billing - collections - and disbursement policies and procedures
Collateral
48. The elapsed time between financial statements. Common accounting periods
FTE
Profitability ratios
Accounting period
Service centers
49. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Cash flows from investing activities
Strategic planning
Activity Based Costing
Transaction
50. Revenues generated from an organization's operating activities.
Liabilities
Operating revenues
Capital assets
Capital financing