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ACCA Financial Management
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acca
Instructions:
Answer 50 questions in 15 minutes.
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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 budget in which line items are presented by program.
Non-current liabilities
Coupon payment
Asset mix
Program budget
2. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
HMO
Balance sheet
Increase in unrestricted net assets
Capital
3. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Statement of changes in net assets
Performance measure
Fixed costs
Tax-exempt bonds
4. Non-operating income.
Other income
Fixed costs
Net increase (decrease) in cash and cash equivalents
Ending inventory
5. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
SWOT analysis
Liabilities
Intermediate Cost Object
Direct costs
6. Literally non-movable assets. Generally used to refer to buildings and equipment.
Fixed assets
Statement of changes in net assets
Annuity
Accounts payable
7. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Net accounts receivable
Prepaid assets
Investor
Strategic planning
8. 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.
Line of credit
Revenue rate variance
Fixed Asset Turnover
Disbursement float
9. The purchase of assets with contributed and internally generated funds. See also Debt financing.
G & A expenses
Equity financing
Assets
Net assets to total assets
10. Service center costs are allocated to both mission centers and other service centers
Step Down
Fixed (interest) rate debt
Mission Center
Accounts receivable
11. The increase in the value of an investment from the time it is purchased until the time it is sold.
FTE
Allocation
Capital appreciation
Other income
12. (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.
Leverage
Base Budget
Return on total assets
Net Assets
13. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme
Retained earnings
Other support
Average Days Receivable
Statement of operations
14. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?
Mission Center
Total asset turnover
Budget
Excess of revenues over expenses
15. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Annuity
Bond rating
ABC
Direct costs
16. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Collateral
Operating budget
Program budget
Effectiveness
17. An investment that generates an annuity for an indefinite period of time - basically forever.
Product diversity
Perpetuity
Revenues
Mutually exclusive projects
18. Demonstrates the ability to pay off long term debt
Times interest earned
Capital financing
Long Term Solvency ratios
Non-operating income
19. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Accounts receivable
Accrued expenses
Financing activities
Footnotes
20. The absence of risk in an investment.
Collateral
Quick ratio
Certainty
Effectiveness
21. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Mutually exclusive projects
Book value
Mortgage
Cost
22. An entity that is owed money for lending funds or supplying goods or services on credit.
Fixed asset turnover
Expansion decisions
Creditor
Issuer
23. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Cost object
Capital budget
FTE
FV
24. [(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.
Tax-exempt bonds
Expense cost variance
Collections policies and procedures
Activity Based Costing
25. 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.
Cost
Income from investments
Accrual basis of accounting
Bond rating agency
26. 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.
Budget
Depreciation
IRR
Billing - collections - and disbursement policies and procedures
27. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Breakeven point
Bond rating agency
Efficiency
Bonds
28. Irregular cash flows - typically occurring at the end of the life of a project.
Non-regular cash flows
Beginning inventory
Properties and equipment
Mutually exclusive projects
29. 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.
Non-operating expenses
Coupon
Comparative approach
Dividends
30. Revenues of the organization earned in non-healthcare related activities.
Leverage
Investor
Non-operating revenues
Fixed assets
31. [Net Accounts Receivable/(Revenue/356)]
Spillover cash flows
Line of credit
Long-term debt - net of current portion
Average Days Receivable
32. 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.
Increase in unrestricted net assets
Tax-exempt bonds
Program budget
Statement of changes in net assets
33. Budgets that typically cover two to five years.
Line-item budget
Final cost object
Multiyear budget
Effectiveness
34. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Total revenue
Statement of operations
Properties and equipment - net
Collection float
35. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Cash flows from financing activities
Capital financing
Annuity
Co-payments
36. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Collateral
Total revenue
Net patient service revenue
Profit margin
37. The costs of a service after taking into account its direct and fair share of allocated costs.
Fully allocated costs
Allocation
Discounted cash flows
Budget
38. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Collections policies and procedures
Fixed Asset Turnover
FTE
Other income
39. Assets = Liabilities + Net Assets (aka Equity).
Net assets to total assets
Present value of an annuity
Basic accounting equation
Not-for-profit
40. 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.
Fixed (interest) rate debt
Assets
Administrative profit centers
Mortgage bonds
41. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor
Cash flows from investing activities
Allowance for uncollectibles
Responsibility center
Fully allocated costs
42. Amounts the organization is obligated to pay others - including suppliers and creditors.
Accounts payable
Investment grade
Debt to equity
Net accounts receivable
43. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Net accounts receivable
Beginning inventory
Net increase (decrease) in cash and cash equivalents
Mutually exclusive projects
44. Highly liquid current assets such as interest-bearing savings and checking accounts.
Revenue budget
G & A expenses
Cash equivalents
Current ratio
45. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
Other support
Coupon payment
Efficiency
Total asset turnover
46. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Interest
Centralization
Coupon rate
Expense cost variance
47. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Cost of goods sold
Non-current assets
Bonds
Indirect costs
48. 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.
Net present value
Tax-exempt bonds
Accounts payable
Line-item budget
49. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Return on net assets
Asset Management ratios
Hedge
Market rate of interest
50. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.
Liabilities
Capital budget
Revenue budget
Operating expenses
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