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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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study here
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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 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.
Operating budget
Non-regular cash flows
Liabilities
Cost avoidance
2. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Performance measure
Cash equivalents
Mission Center
Capital structure decision
3. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Spillover cash flows
Operating revenues
Bond rating
Expense cost variance
4. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Mortgage bonds
Ratio analysis
Cost Accounting
Realization principle
5. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Breakeven point
Activity Based Costing
Loan amortization schedule
Step Down
6. [Total Liabilities/ Net assets]
Contribution margin
Operating expenses
Restricted donation
Debt to equity
7. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Lender
Cost of goods sold
Expenses
Financing activities
8. Non-operating income.
Incremental cash flows
Billing float
Other income
Assets
9. A legal obligation to pay the holder of the note or lien.
Final cost object
Time value of money
Notes payable
Net Assets to Total Assets
10. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Operating margin
Payback
Fixed Asset Turnover
Investor
11. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Performance budget
Mission Center
Net Assets to Total Assets
Parent organization
12. [Surplus/Operating Revenues]
Long-term investments
Profit margin
Certainty
Net Assets
13. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Revenue rate variance
Cash and cash equivalents
Amortization of a loan
Capital structure ratios
14. 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.
Service centers
Asset Turnover Ratio
Donor
Capital assets
15. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.
Billing float
Strategic financial planning
Debt service coverage
Top-down budgeting
16. A note payable that has as collateral real assets and that requires periodic payments.
Income from investments
Mortgage
Investment grade
Short-term financing
17. Responsibility centers responsible for making a certain return on investments.
Cost Accounting
Investment centers
Cost of goods sold
Cash flows from investing activities
18. 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.
Non-operating expenses
Product diversity
Liabilities
Common costs
19. The current traded rate for similar risk securities.
Average Days Receivable
Increase in unrestricted net assets
Market rate of interest
Activity ratios
20. Capital investment decisions designed to increase an organization's strategic position.
Strategic decisions
Comparative approach
SWOT analysis
Allocation base
21. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Cost of capital
Current assets
Clinical cost centers
Line of credit
22. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.
Perpetuity
Accountability
Long-term financing
Balance sheet
23. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Hedge
Billing float
Prepaid assets
Controlling activities
24. The total amount of multiyear debt due in future years.
Expansion decisions
Product diversity
Long-term debt - net of current portion
IRR
25. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
Increase in unrestricted net assets
Step-down method
Footnotes
Cash basis of accounting
26. [(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
Ending inventory
Issuer
Debt service coverage
Short-term financing
27. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Fully allocated costs
Controlling activities
Balance sheet
Net Assets
28. The section of the expense budget that forecasts salary and benefits.
Activity ratios
Fixed labor budget
Long-term financing
Time value of money
29. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Centralization
Restricted donation
Revenues
Accrued expenses
30. Highly liquid current assets such as interest-bearing savings and checking accounts.
Co-payments
Basis of Allocation
Cash equivalents
Asset Management ratios
31. Operating income not reported elsewhere under revenues - gains - and other support.
Other revenues
Intermediate Cost Object
Service centers
Net working capital
32. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Total asset turnover
Donation
Budget
Spillover cash flows
33. Service center costs are allocated to both mission centers and other service centers
Coupon rate
Step Down
MV
Fixed asset turnover
34. The idea that a dollar today is worth more than a dollar in the future.
Revenue rate variance
Time value of money
SWOT analysis
Top-down/bottom-up approach
35. 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
Statement of operations
Temporarily restricted net assets
Discount rate
Common costs
36. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Coupon
Discount rate
Product diversity
Compounding
37. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Operating expenses
Discounted cash flows
SWOT analysis
Statement of changes in net assets
38. A method by which the organization develops its strategies and budgets to meet future financial targets.
Ending inventory
Capital structure decision
Revenue rate variance
Strategic financial planning
39. 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.
Budget
Strategic financial planning
Non-current liabilities
Payback
40. 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.
Prepaid assets
Accrued expenses
Net present value
Restricted donation
41. Private entity or individual who makes a donation
Donor
Non-operating ratio
Retained earnings
Amortization of a loan
42. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Activity ratios
Cash flows from operating activities
Cash flows from financing activities
Asset Management ratios
43. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Current liabilities
Statement of operations
Traditional profit centers
Dividends
44. The cash flows derived from an organization's operating activities.
Revenue enhancement
Fixed (interest) rate debt
Step-down method
Operating cash flows
45. The income (operating revenues -operating expenses) earned in non-health-care related activities.
FV
Long-term financing
Liquidity
Non-operating income
46. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Assets
Liquidity ratios
Revenues
Allowance for uncollectibles
47. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Breakeven point
Non-operating ratio
Temporarily restricted net assets
Lien
48. [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.
Current ratio
Cash flows from financing activities
Investment grade
Issuer
49. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Cost object
Opening inventory
Fixed labor budget
Profitability ratios
50. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Spillover cash flows
Non-current assets
Excess of revenues over expenses
Cost of goods sold
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