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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. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






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






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






4. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






6. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






7. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






8. {current liabilities/[(total expenses






9. The budget used to forecast operating expenses.






10. A method by which the organization develops its strategies and budgets to meet future financial targets.






11. 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.






12. 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






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






14. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






15. 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.






16. Amounts due to the organization from patients - third parties - and others.






17. The current traded rate for similar risk securities.






18. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






19. The degree to which standards are met.






20. [Total Liabilities/ Net assets]






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






22. 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.






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






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






25. 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.






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






27. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






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






29. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






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






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






32. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






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






34. A legal obligation to pay the holder of the note or lien.






35. 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.






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






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






38. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






40. 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






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






42. 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.






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






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






45. Private entity or individual who makes a donation






46. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






47. [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.






48. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






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






50. 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.