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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. 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






2. 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.






3. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






4. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






6. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






7. Price times total quantity.






8. The total amount of multiyear debt due in future years.






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






10. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






11. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






12. 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.






13. [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).






14. An investment that generates an annuity for an indefinite period of time - basically forever.






15. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






16. Ratios designed to answer the question: How profitable is the organization?






17. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






18. Donated assets that have restrictions on their use which will never be removed.






19. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






20. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






22. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






23. 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.






24. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






25. 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.






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






27. Amounts earned by the organization from the provision of service or sale of goods.






28. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






29. The increase in the value of an investment from the time it is purchased until the time it is sold.






30. 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.






31. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






32. Being subject to sanctions with respect to carrying out responsibilities.






33. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






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






35. 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.






36. 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.






37. [(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






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






39. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






40. 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.






41. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






42. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






43. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






44. What a series of equal payments in the future is worth today taking into account the time value of money.






45. Expenses that have been incurred - but not yet paid.






46. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






47. [(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






48. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






49. 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.






50. Assets that have a physical presence.