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. 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.






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






3. 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






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






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






6. The absence of risk in an investment.






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






8. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






9. The amount of supplies used to provide a service or good.






10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






11. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






12. The revenue and expense budgets of an organization.






13. Price times total quantity.






14. Directly related to the purposes of the organization and the delivery of services






15. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






16. The cash flows derived from an organization's operating activities.






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






18. 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.






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






20. {current liabilities/[(total expenses






21. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






22. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






23. Supplementing traditional sources of revenue with new sources.






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






25. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






26. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






27. Literally non-movable assets. Generally used to refer to buildings and equipment.






28. The increase in the value of an investment from the time it is purchased until the time it is sold.






29. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






30. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






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






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






34. An organization's financial obligations that are to be paid within one year.






35. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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






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






38. 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.






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






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






41. 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.






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






43. The difference between what was planned (budgeted) and what was achieved (actual).






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






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






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






47. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






49. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






50. [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.