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






2. The absence of risk in an investment.






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






4. [(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






5. 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.






6. [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?






7. The changes in cash resulting from the normal operating activities of the organization.






8. 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.






9. The activities of an organization directly related to its main line of business.






10. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






11. A situation in which if one project is implemented the other(s) will not be.






12. (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;






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






14. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






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






16. 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.






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






18. 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.






19. 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.






20. 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.






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






22. 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.






23. 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.






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






25. Financing that will be paid back in less than one year.






26. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






27. Budgets that typically cover two to five years.






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






29. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






30. 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.






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






32. 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.






33. 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.






34. The current traded rate for similar risk securities.






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






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






37. Current assets. Net working capital equals current assets –current liabilities.






38. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






39. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






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






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






43. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






44. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






45. [(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






46. [Surplus/Operating Revenues]






47. Ratios designed to answer the question: How profitable is the organization?






48. 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.






49. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






50. A note payable that has as collateral real assets and that requires periodic payments.