Test your basic knowledge |

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






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






3. [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?






4. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.






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






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






7. 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.






8. {current liabilities/[(total expenses






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






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






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






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






13. 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.






14. The current traded rate for similar risk securities.






15. [Total Liabilities/ Net assets]






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






17. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






18. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






19. 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.






20. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






21. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






22. 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.






23. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






24. The ease and speed with which an asset can be turned into cash.






25. The degree to which standards are met.






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






27. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






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






29. 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.






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






31. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






32. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






33. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






34. 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.






35. Operating income not reported elsewhere under revenues - gains - and other support.






36. Non-operating income.






37. The expenses incurred from an organization's operating activities.






38. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






39. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






40. process of measuring the resources (costs) used to produce results.






41. An entity that is owed money for lending funds or supplying goods or services on credit.






42. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






43. The elapsed time between financial statements. Common accounting periods






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






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






46. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






48. Financing used expressly for the purchase of non-current assets.






49. 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.






50. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.