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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. 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.






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






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






4. The resources owned by the organization. It is one of the three major categories on the balance sheet.






5. Ratios that measure how efficiently an organization is using its assets to produce revenues.






6. An assignment or grading of the likelihood that an organization will not default on a bond.






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






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






9. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






10. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






11. Return on investment. The percentage gain or loss experienced from an investment.






12. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






13. Costs that are traced to a cost object. See also Indirect costs and Cost object.






14. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






15. Gross proceeds less the underwriter's fee and other issuance fees.






16. 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.






17. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






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






20. The absence of risk in an investment.






21. 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.






22. 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.






23. 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.






24. The revenue and expense budgets of an organization.






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






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






27. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






28. 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






29. An entity that owns other companies.






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






31. 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.






32. The cost of activities that take place to produce the final cost object






33. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






34. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






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






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






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






38. 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.






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






40. {current liabilities/[(total expenses






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






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






43. 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.






44. 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.






45. Non-operating income.






46. 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.






47. 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.






48. The rise in an economy's general level of prices.






49. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






50. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor