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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 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.






2. An entity that owns other companies.






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






4. Portion of the profits the organization keeps in-house to use in support of its mission.






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






6. 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.






7. The revenue and expense budgets of an organization.






8. The costs of a service after taking into account its direct and fair share of allocated costs.






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






10. 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.






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






12. 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






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






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






15. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






16. The degree to which standards are met.






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






18. [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






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. 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.






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






22. Each service center






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






24. Proceeds lost by foregoing other opportunities.






25. Assets that have a physical presence.






26. 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






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






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






29. Return on investment. The percentage gain or loss experienced from an investment.






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






31. 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.






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






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






34. 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.






35. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






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






38. 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.






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






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






41. Amounts the organization is obligated to pay others - including suppliers and creditors.






42. Literally non-movable assets. Generally used to refer to buildings and equipment.






43. 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.






44. A budget in which line items are presented by program.






45. 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.






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






47. 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.






48. 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.






49. The amount of supplies used to provide a service or good.






50. {[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).