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






2. Capital investment decisions designed to increase the operational capability of a health care organization.






3. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






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






5. Financial obligations that will be paid off over a time period longer than one year






6. 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






7. Donated assets that have restrictions on their use which will never be removed.






8. A good or service provided in return for some type of compensation.






9. Recording expenses associated with making revenue at the same time as revenues are recognized






10. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






12. An investment that generates an annuity for an indefinite period of time - basically forever.






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






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






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






16. Expenses that have been incurred - but not yet paid.






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






18. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






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






20. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






21. A security interest in one or more assets granted to lenders in a secured loan.






22. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






23. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






24. The current traded rate for similar risk securities.






25. Budgets that typically cover two to five years.






26. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






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






28. Amounts earned by the organization from the provision of service or sale of goods.






29. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






30. 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.






31. An entity that owns other companies.






32. Gross proceeds less the underwriter's fee and other issuance fees.






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






34. 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.






35. [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).






36. Amounts the organization is obligated to pay others - including suppliers and creditors.






37. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






38. An organization's financial obligations that are to be paid within one year.






39. Expenses of the organization incurred in non-health-care related activities.






40. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






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






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






44. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






45. Non-operating income.






46. 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






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






48. 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.






49. [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?






50. The absence of risk in an investment.