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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. 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.






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






3. 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).






4. Assets that have a physical presence.






5. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






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






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






8. 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.






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






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






11. Each service center






12. Highly liquid current assets such as interest-bearing savings and checking accounts.






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






14. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






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






17. Private entity or individual who makes a donation






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






19. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






20. [(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






21. [Inventory/ (Cost of Goods Sold/365)]






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






23. 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.






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






25. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






26. 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.






27. {[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).






28. 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






29. (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.






30. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






31. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






32. {current liabilities/[(total expenses






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






34. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






35. 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






36. 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.






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






38. 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.






39. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






40. A legal obligation to pay the holder of the note or lien.






41. Financing used expressly for the purchase of non-current assets.






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






43. 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.






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






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






46. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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






48. The elapsed time between financial statements. Common accounting periods






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






50. Revenues generated from an organization's operating activities.