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






2. 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.






3. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






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






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






6. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






7. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






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






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






10. Properties and equipment less accumulated depreciation.






11. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






12. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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






14. Previously restricted assets no longer restricted because the terms of the restriction have been met.






15. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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






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






18. [Surplus/Operating Revenues]






19. 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.






20. A certificate attached to a bond representing the amount of interest to be paid to the holder.






21. 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.






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






23. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






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






25. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






26. 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.






27. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






28. 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.






29. 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.






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






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






32. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






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






34. 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.






35. Series of payments over time - such as interest paid to bondholders.






36. 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






37. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






38. 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






39. Revenue is recorded when goods or services are delivered






40. 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






41. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






42. 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






43. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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






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






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






47. The cost of the supplies on hand at the beginning of the year.






48. Supplementing traditional sources of revenue with new sources.






49. (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;






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