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






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






3. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






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






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






6. The section of the expense budget that forecasts salary and benefits.






7. 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.






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






9. The income (operating revenues -operating expenses) earned in non-health-care related activities.






10. Revenues of the organization earned in non-healthcare related activities.






11. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






12. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






14. An entity that sells bonds in order to raise money.






15. The degree of dispersion of responsibility within an organization. See also Centralization.






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






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






18. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






19. 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.






20. 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.






21. 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.






22. 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.






23. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






25. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






26. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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






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






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






30. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






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






32. [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).






33. The rise in an economy's general level of prices.






34. The difference between current assets and current liabilities.






35. Proceeds lost by foregoing other opportunities.






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






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






38. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






39. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






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. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






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






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






44. 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.






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






46. Revenue is recorded when goods or services are delivered






47. 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.






48. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






49. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






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