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






2. 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.






3. A good or service provided in return for some type of compensation.






4. 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.






5. A security whose interest rate does not change during the lifetime of the bond.






6. A security interest in one or more assets granted to lenders in a secured loan.






7. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






9. Budgets that typically cover two to five years.






10. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






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






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






13. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






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






15. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






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






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






18. 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.






19. 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






20. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






21. 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.






22. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






23. Proceeds lost by foregoing other opportunities.






24. Price times total quantity.






25. Non-operating income.






26. Current assets. Net working capital equals current assets current liabilities.






27. process of measuring the resources (costs) used to produce results.






28. Financial obligations that will be paid off over a time period longer than one year






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






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






31. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






32. 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.






33. 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






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






35. What a series of equal payments in the future is worth today taking into account the time value of money.






36. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






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






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






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






41. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






42. An entity that owns other companies.






43. 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.






44. 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.






45. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






46. The absence of risk in an investment.






47. 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.






48. 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.






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






50. 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