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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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. 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.
Clinical cost centers
Cost
G & A expenses
Hedge
2. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor
Operating activities
Cash flows from operating activities
ABC
Beginning inventory
3. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Investment grade
Cash basis of accounting
Operating income
Accrued expenses
4. Donated assets that have restrictions on their use which will never be removed.
Long Term Solvency ratios
Realization principle
Permanently restricted net assets
Operating activities
5. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Revenue rate variance
Operating expenses
Income from investments
6. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Operating cash flows
Breakeven point
Final cost object
Debt service coverage
7. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
SWOT analysis
Transaction
Other support
Performance budget
8. 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.
FTE
Net present value
Balance sheet
Current ratio
9. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Restricted donation
FV
MV
Depreciation
10. Current assets. Net working capital equals current assets –current liabilities.
Periodic payments
Footnotes
Book value
Working capital
11. The degree to which standards are met.
Effectiveness
Short-term financing
Fixed labor budget
Cash flows from financing activities
12. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Expansion decisions
Incremental cash flows
Operating income
Notes payable
13. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Working capital
Capital budget
Net assets released from restriction
Statement of operations
14. A transaction that reduces the risk of an investment.
Statement of operations
Increase in unrestricted net assets
ABC
Hedge
15. Properties and equipment less accumulated depreciation.
Properties and equipment - net
For-profit
Net working capital
Lease
16. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Comparative approach
Non-regular cash flows
Net patient service revenue
Accountability
17. 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.
Performance measure
Capital assets
Cash budget
Co-payments
18. Financing used expressly for the purchase of non-current assets.
Dividends
Intermediate Cost Object
Spillover cash flows
Capital financing
19. 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.
Activity ratios
Administrative profit centers
Net Assets
Bad debt
20. An entity that owns other companies.
IRR
Cost avoidance
For-profit
Parent organization
21. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Realization principle
Depreciation
Incremental cash flows
Asset Management ratios
22. The amount of time between when an organization receives a service and pays for it.
Average payment period
Disbursement float
Working capital
Increase in unrestricted net assets
23. [(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.
Capital investment decisions
Restricted donation
Current ratio
Expense cost variance
24. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Current assets
Allowance for uncollectibles
Efficiency
Book value
25. The increase in the value of an investment from the time it is purchased until the time it is sold.
Capital appreciation
Efficiency
Allocation
Long-term investments
26. A budget in which line items are presented by program.
Revenue budget
Operating cash flows
Program budget
Billing float
27. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Net patient service revenue
Financing activities
Certainty
Creditor
28. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.
Budget variance
Annuity
Multiyear budget
Allowance for uncollectibles
29. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Payback
Current assets
Allowance for uncollectibles
Expenses
30. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Revenue rate variance
Financing activities
Equity financing
Other income
31. The rise in an economy's general level of prices.
Strategic decisions
Book value
Other revenues
Inflation
32. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Capital structure ratios
Cash flows from investing activities
Administrative cost centers
Investment centers
33. 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.
Perpetuity
MV
Fixed (interest) rate debt
Cash budget
34. Stated interest rate on a bond - as promised by the issuer.
Investment grade
Coupon rate
Statement of cash flows
Capital structure ratios
35. Revenue is recorded when goods or services are delivered
Profitability ratios
Realization principle
Cost Accounting
Cost object
36. {current liabilities/[(total expenses
Strategic financial planning
Quick ratio
Average payment period
Asset Management ratios
37. [Total assets/Net Assets]
Net accounts receivable
Bond rating agency
Leverage
Increase in unrestricted net assets
38. 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
Operating income
Contribution margin
Certainty
Total asset turnover
39. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Activity ratios
Budget
Accounts receivable
Capital structure ratios
40. Amounts due to the organization from patients - third parties - and others.
Accounts receivable
Budget variance
Time value of money
Bond rating agency
41. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization
Cash flows from financing activities
Collection float
Times interest earned
Effectiveness
42. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Incremental cash flows
Step Down
Total revenue
Operating income
43. 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.
Lien
Operating cash flows
Bonds
Debt service coverage
44. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.
Cash flows from investing activities
Cash flows from financing activities
Cost avoidance
Co-payments
45. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Fixed supplies budget
Times interest earned
Ending inventory
Debt to equity
46. The section of the expense budget that forecasts salary and benefits.
Amortization of a loan
Incremental cash flows
Capital structure decision
Fixed labor budget
47. An organization's financial obligations that are to be paid within one year.
Operating margin
Market rate of interest
Current liabilities
Activity Based Costing
48. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
ABC
Fixed Asset Turnover
Base Budget
Clinical cost centers
49. The changes in cash resulting from the normal operating activities of the organization.
Capital assets
Net proceeds from a bond issuance
Cash flows from operating activities
Investor
50. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Expense cost variance
Amortization of a loan
Traditional profit centers
Capital