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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. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






2. 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






3. [Total assets/Net Assets]






4. The total amount of multiyear debt due in future years.






5. [Net Accounts Receivable/(Revenue/356)]






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






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






8. A situation in which if one project is implemented the other(s) will not be.






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






10. The degree of dispersion of responsibility within an organization. See also Centralization.






11. 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.






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






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






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






15. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






16. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






17. 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.






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






19. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






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






21. 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






22. [(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






23. Revenues of the organization earned in non-healthcare related activities.






24. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






25. The percentage of each asset relative to total assets.






26. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






27. Series of payments over time - such as interest paid to bondholders.






28. Responsibility centers responsible for making a certain return on investments.






29. 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.






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. [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).






32. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






33. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






34. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






35. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






36. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






37. Budgets that typically cover two to five years.






38. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






39. Previously restricted assets no longer restricted because the terms of the restriction have been met.






40. The difference between current assets and current liabilities.






41. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






43. Non-operating income.






44. The degree to which standards are met.






45. Revenues generated from an organization's operating activities.






46. 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.






47. How an organization chooses to finance its working capital needs.






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






49. 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.






50. Service center costs are allocated to both mission centers and other service centers