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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. {current liabilities/[(total expenses






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






3. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






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






5. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






6. Revenue is recorded when goods or services are delivered






7. 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.






8. Full-time equivalent employees. Two half-time employees equal one FTE.






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






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






11. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






12. The degree to which standards are met.






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






14. The revenue and expense budgets of an organization.






15. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






16. Irregular cash flows - typically occurring at the end of the life of a project.






17. [Total Liabilities/ Net assets]






18. 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.






19. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






20. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






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






22. The idea that a dollar today is worth more than a dollar in the future.






23. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






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






25. An entity that owns other companies.






26. 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.






27. An investment that generates an annuity for an indefinite period of time - basically forever.






28. 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.






29. 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.






30. The current traded rate for similar risk securities.






31. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






32. Proceeds lost by foregoing other opportunities.






33. 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.






34. 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.






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






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






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






38. An entity that gives capital to another entity in expectation of a financial or non-financial return.






39. 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.






40. 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.






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






42. 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.






43. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






44. Demonstrates the ability to pay off long term debt






45. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






46. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






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






48. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






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