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ACCA Financial Management
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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 increase in the value of an investment from the time it is purchased until the time it is sold.
Net present value
Accounting period
Capital appreciation
Multiyear budget
2. [(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
Mutually exclusive projects
Opportunity cost
Operating budget
Expense volume variance
3. 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.
Line of credit
Interest
Breakeven point
Debt to equity
4. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Coupon payment
Clinical cost centers
Asset Turnover Ratio
Beginning inventory
5. 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.
Non-current liabilities
Controlling activities
Retained earnings
IRR
6. The costs of a service after taking into account its direct and fair share of allocated costs.
Market rate of interest
Cash budget
Fully allocated costs
Footnotes
7. 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.
Cost Accounting
Strategic decisions
Budget
Operating cash flows
8. 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).
Fixed asset turnover
Prepaid assets
Cost of capital
Deferred revenues
9. Expenses that have been incurred - but not yet paid.
Capital appreciation
Accrued expenses
Top-down budgeting
Cash equivalents
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.
Capital assets
Horizontal analysis
Strategic decisions
Statement of changes in net assets
11. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Step-down method
Financing mix
Cost of capital
Income from investments
12. The budget used to forecast operating expenses.
Net present value
Non-operating expenses
Fixed assets
Expense budget
13. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Donation
Discount rate
Effectiveness
Strategic planning
14. Amounts due to the organization from patients - third parties - and others.
Other revenues
Accounts receivable
Cash flows from operating activities
Non-operating income
15. Responsibility centers responsible for making a certain return on investments.
Other expenses
Investment centers
Incremental cash flows
Restricted donation
16. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Cost of capital
Balance sheet
Net Assets to Total Assets
17. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Mortgage bonds
Increase in unrestricted net assets
Spillover cash flows
Cost avoidance
18. The degree to which standards are met.
Effectiveness
Non-operating income
Hedge
Operating income
19. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Non-operating revenues
Acid test ratio
Beginning inventory
Creditor
20. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Excess of revenues over expenses
Present value of an annuity
Retained earnings
Working capital
21. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.
FV
Statement of operations
Cost of goods sold
Profit margin
22. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Allowance for uncollectibles
Increase in unrestricted net assets
Current assets
Budget
23. The amount of time between when an organization receives a service and pays for it.
ROI
Retained earnings
Disbursement float
Fixed assets
24. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Mission Center
Cost avoidance
Fixed Asset Turnover
Quick ratio
25. The changes in cash resulting from the normal operating activities of the organization.
Cash flows from investing activities
Cash flows from operating activities
Amortization of a loan
Budget variance
26. Irregular cash flows - typically occurring at the end of the life of a project.
Responsibility center
Strategic planning
Matching principle
Non-regular cash flows
27. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Mortgage
Accrued expenses
Coupon
Accrual basis of accounting
28. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Total revenue
Asset mix
Asset Turnover Ratio
29. Budgets that typically cover two to five years.
Allocation base
Equity financing
Multiyear budget
Net increase (decrease) in cash and cash equivalents
30. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Book value
Top-down/bottom-up approach
Long-term debt - net of current portion
Budget
31. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Operating expenses
Efficiency
Assets
Total asset turnover
32. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Product diversity
Responsibility center
For-profit
Excess of revenues over expenses
33. Literally non-movable assets. Generally used to refer to buildings and equipment.
Breakeven point
Fixed assets
Days cash on hand
Properties and equipment - net
34. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Fixed asset turnover
Beginning inventory
Administrative profit centers
Capital assets
35. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Administrative cost centers
Strategic planning
Responsibility center
Operating cash flows
36. Expenses of the organization incurred in non-health-care related activities.
Cost centers
Activity Based Costing
Cost
Non-operating expenses
37. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Budget
Traditional profit centers
Fixed Asset Turnover
Market rate of interest
38. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Long-term debt - net of current portion
Hedge
Financing activities
Liquidity ratios
39. [(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
Comparative approach
Expense budget
Debt service coverage
Short-term financing
40. The cash flows derived from an organization's operating activities.
Operating cash flows
Donor
SWOT analysis
Creditor
41. Each service center
Single/Simple Step
Centralization
Expansion decisions
Line-item budget
42. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Top-down budgeting
Transaction
Investor
Breakeven point
43. 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.
Investment centers
Depreciation
Cash and cash equivalents
Statement of operations
44. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Liquidity
Lease
Allocation base
Breakeven point
45. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Accountability
Controlling activities
Final cost object
Statement of changes in net assets
46. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Strategic planning
Program budget
Book value
Net increase (decrease) in cash and cash equivalents
47. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.
Fully allocated costs
Horizontal analysis
Acid test ratio
Compounding
48. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Billing - collections - and disbursement policies and procedures
Other income
Final cost object
Statement of changes in net assets
49. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Base Budget
Single/Simple Step
Investment grade
Administrative cost centers
50. process of measuring the resources (costs) used to produce results.
Fixed labor budget
Cost Accounting
Accountability
Operating margin
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