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Test your basic knowledge |
ACCA Financial Management
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Subjects
:
certifications
,
business-skills
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acca
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. 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
Controlling activities
Creditor
Cash flows from investing activities
Precautionary purposes
2. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Operating margin
Capital structure ratios
Return on net assets
Non-current assets
3. A situation in which if one project is implemented the other(s) will not be.
Mutually exclusive projects
Asset mix
Capital financing
Tangible assets
4. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Cash budget
Cost of capital
Clinical cost centers
Net patient service revenue
5. Revenues of the organization earned in non-healthcare related activities.
Coupon payment
Dividends
Interest
Non-operating revenues
6. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.
Float
Acid test ratio
Traditional profit centers
Fixed costs
7. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Equity financing
Net assets to total assets
Co-payments
Creditor
8. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Net proceeds from a bond issuance
Average payment period
Debt to equity
Capital structure ratios
9. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Income from investments
Payback
Capital appreciation
Controlling activities
10. Responsibility centers responsible for making a certain return on investments.
Spillover cash flows
Cash and cash equivalents
Expense cost variance
Investment centers
11. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.
Days cash on hand
Ratio analysis
Budget
Performance budget
12. 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.
Revenue rate variance
Statement of cash flows
Issuer
Donation
13. [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?
Performance budget
Net accounts receivable
Capital
Total asset turnover
14. How an organization chooses to finance its working capital needs.
Mission Center
Net increase (decrease) in cash and cash equivalents
Direct costs
Financing mix
15. An assignment or grading of the likelihood that an organization will not default on a bond.
G & A expenses
Long Term Solvency ratios
Co-payments
Bond rating
16. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Payback
Net proceeds from a bond issuance
Asset Management ratios
Operating cash flows
17. 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
Cash flows from financing activities
Not-for-profit
Realization principle
Accounts receivable
18. 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.
Traditional profit centers
Net present value
Equity financing
Current liabilities
19. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Accounting period
Average Days Receivable
Net patient service revenue
Long-term investments
20. (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.
Net working capital
Long Term Solvency ratios
Return on total assets
Cash flows from financing activities
21. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Excess of revenues over expenses
Lender
Cost centers
Accounts receivable
22. 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.
Strategic financial planning
Liabilities
Fixed labor budget
Cash flows from investing activities
23. 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.
Line-item budget
Financing activities
Performance budget
Precautionary purposes
24. Revenues generated from an organization's operating activities.
Operating revenues
Donation
Properties and equipment - net
Final cost object
25. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Capital
Temporarily restricted net assets
Indirect costs
Non-operating ratio
26. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Return on total assets
Cash basis of accounting
Restricted donation
Non-operating revenues
27. A good or service provided in return for some type of compensation.
Transaction
Budget variance
Basis of Allocation
Average payment period
28. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Tax-exempt bonds
Asset Management ratios
Direct costs
Cash and cash equivalents
29. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Coupon
Net proceeds from a bond issuance
Current ratio
Discounted cash flows
30. 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.
Fixed Asset Turnover
Collections policies and procedures
Net increase (decrease) in cash and cash equivalents
Administrative profit centers
31. [Total assets/Net Assets]
Temporarily restricted net assets
Expenses
Not-for-profit
Leverage
32. Expenses that have been incurred - but not yet paid.
Cost avoidance
Accrued expenses
Long-term debt to net assets ratio
Common costs
33. Private entity or individual who makes a donation
Donation
Activity ratios
Donor
Collateral
34. Expenses of the organization incurred in non-health-care related activities.
Non-operating expenses
Allocation
Non-operating ratio
Net assets to total assets
35. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).
Deferred revenues
Days cash on hand
Mortgage bonds
Collections policies and procedures
36. An entity that owns other companies.
Working capital
Leverage
Other support
Parent organization
37. 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
Coupon payment
Allocation
Financing activities
38. 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.
Fixed assets
Asset Management ratios
Step-down method
Long-term financing
39. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Capital financing
Other expenses
Net Assets to Total Assets
Expense cost variance
40. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.
Opportunity cost
Cash flows from financing activities
Inflation
Footnotes
41. The cost of the supplies on hand at the beginning of the year.
Basis of Allocation
Expansion decisions
Opening inventory
ROI
42. The absence of risk in an investment.
Working capital
MV
Certainty
Notes payable
43. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Revenue budget
Capital
Net increase (decrease) in cash and cash equivalents
Efficiency
44. [(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
Liabilities
Footnotes
Prepaid assets
Debt service coverage
45. 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.
Billing float
FV
Revenue rate variance
Bond rating
46. The idea that a dollar today is worth more than a dollar in the future.
Depreciation
Accounting period
Time value of money
Non-operating ratio
47. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Short-term financing
Properties and equipment
Capital assets
G & A expenses
48. 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.
Current assets
Cost avoidance
Investment centers
Opening inventory
49. [Total Liabilities/ Net assets]
Line of credit
Long Term Solvency ratios
Debt to equity
Creditor
50. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Fixed asset turnover
Capital
Net Assets to Total Assets
Book value