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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. A budget in which line items are presented by program.






2. Portion of the profits the organization keeps in-house to use in support of its mission.






3. A transaction that reduces the risk of an investment.






4. 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






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






6. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






7. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






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).






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. The section of the expense budget that forecasts salary and benefits.






11. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






12. Capital investment decisions designed to increase an organization's strategic position.






13. The degree to which standards are met.






14. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






15. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






16. Supplementing traditional sources of revenue with new sources.






17. Current assets. Net working capital equals current assets –current liabilities.






18. A certificate attached to a bond representing the amount of interest to be paid to the holder.






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






20. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






21. Non-operating income.






22. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






23. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






24. 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.






25. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






26. 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.






27. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






28. 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.






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






30. 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.






31. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






32. 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.






33. A note payable that has as collateral real assets and that requires periodic payments.






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






35. Stated interest rate on a bond - as promised by the issuer.






36. 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






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






38. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






40. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






41. [(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






42. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






43. [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).






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






45. 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.






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






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






48. 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.






49. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






50. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.