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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. The current traded rate for similar risk securities.
Fixed labor budget
Line-item budget
Accounts receivable
Market rate of interest
2. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Cost object
Net assets released from restriction
Discount rate
Cost centers
3. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
Step-down method
Profitability ratios
Net Assets to Total Assets
Non-regular cash flows
4. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Strategic financial planning
Administrative cost centers
Controlling activities
Long-term debt to net assets ratio
5. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.
Footnotes
Financing activities
Net patient service revenue
Tangible assets
6. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Restricted donation
Donation
Contribution margin
Payback
7. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Expense cost variance
Collateral
Cash equivalents
Equity financing
8. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Disbursement float
Increase in unrestricted net assets
Expense cost variance
Net increase (decrease) in cash and cash equivalents
9. A good or service provided in return for some type of compensation.
Transaction
Matching principle
Coupon rate
Return on total assets
10. 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.
Service centers
Controlling activities
Lien
Billing float
11. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Mutually exclusive projects
Top-down/bottom-up approach
Parent organization
Net Assets
12. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.
Cash flows from operating activities
Comparative approach
Discounted cash flows
Debt to equity
13. 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.
Common costs
Market rate of interest
Times interest earned
Net assets released from restriction
14. Assets that have a physical presence.
Tangible assets
Quick ratio
Fixed costs
Expenses
15. A transaction that reduces the risk of an investment.
Line of credit
Hedge
Controlling activities
Cost object
16. The difference between current assets and current liabilities.
Capital structure ratios
Line of credit
Net working capital
Discounting
17. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Mortgage bonds
Disbursement float
Co-payments
Lender
18. [(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
Expense volume variance
Operating budget
Market rate of interest
Inflation
19. Supplementing traditional sources of revenue with new sources.
Mail float
Beginning inventory
Revenue enhancement
Performance measure
20. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Asset Turnover Ratio
Single/Simple Step
Opening inventory
Operating income
21. Gross proceeds less the underwriter's fee and other issuance fees.
Equity financing
Net proceeds from a bond issuance
Liquidity ratios
Periodic payments
22. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
Expense cost variance
MV
Return on total assets
Transaction
23. Private entity or individual who makes a donation
ABC
Donor
Lease
Basis of Allocation
24. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Operating income
Capital structure decision
Budget
Indirect costs
25. Operating income not reported elsewhere under revenues - gains - and other support.
ROI
Allowance for uncollectibles
Other revenues
Times interest earned
26. (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
Profitability ratios
Non-operating revenues
Quick ratio
27. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Hedge
Restricted donation
Dividends
Controlling activities
28. Ratios designed to answer the question: How profitable is the organization?
Effectiveness
Long-term investments
Inflation
Profitability ratios
29. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Top-down budgeting
Step-down method
Activity ratios
30. 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.
Operating activities
Discount rate
Cash equivalents
Inflation
31. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Average payment period
Tax-exempt bonds
Allowance for uncollectibles
32. The budget used to forecast operating expenses.
Expense budget
Capital budget
Operating activities
Clinical cost centers
33. 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
Hedge
Cash budget
Precautionary purposes
34. 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.
Cash flows from investing activities
Cash budget
Service centers
Net assets released from restriction
35. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Capital budget
Capital
Opportunity cost
Revenue rate variance
36. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income
Inflation
Debt service coverage
Expense volume variance
Profit margin
37. The cost of activities that take place to produce the final cost object
Basic accounting equation
Intermediate Cost Object
Mortgage bonds
Clinical cost centers
38. 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
ABC
Cash flows from investing activities
Discounting
Non-operating revenues
39. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Strategic planning
Line-item budget
Strategic financial planning
Opportunity cost
40. [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?
Horizontal analysis
Compounding
Total asset turnover
Line-item budget
41. Current assets. Net working capital equals current assets –current liabilities.
Working capital
Dividends
Long-term debt - net of current portion
Cost of goods sold
42. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Coupon payment
Net Assets to Total Assets
Depreciation
Horizontal analysis
43. The degree of dispersion of responsibility within an organization. See also Centralization.
Operating expenses
ROI
Collections policies and procedures
Decentralization
44. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Volume diversity
Current assets
Cash flows from investing activities
Current liabilities
45. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Financing activities
Operating expenses
Float
Accrual basis of accounting
46. Capital investment decisions designed to increase an organization's strategic position.
Payback
Expenses
Strategic decisions
Accountability
47. 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.
Expense volume variance
Present value of an annuity
Billing - collections - and disbursement policies and procedures
Cost of capital
48. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Cost object
Collections policies and procedures
Fixed assets
Liquidity ratios
49. How an organization chooses to finance its working capital needs.
Net Assets
Financing mix
Fixed supplies budget
Top-down budgeting
50. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Long-term debt - net of current portion
Tangible assets
Accumulated depreciation
Capital investment decisions