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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. 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.






2. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






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






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






5. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






7. (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;






8. 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






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






10. Debt to be paid off in a period longer than one year.






11. Directly related to the purposes of the organization and the delivery of services






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






13. Non-operating income.






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






15. A legal obligation to pay the holder of the note or lien.






16. Stated interest rate on a bond - as promised by the issuer.






17. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






18. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






19. 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.






20. 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.






21. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






22. Previously restricted assets no longer restricted because the terms of the restriction have been met.






23. 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






24. 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.






25. Series of payments over time - such as interest paid to bondholders.






26. 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.






27. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






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






29. [Inventory/ (Cost of Goods Sold/365)]






30. 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.






31. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






32. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






33. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






34. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






35. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






36. The income (operating revenues -operating expenses) earned in non-health-care related activities.






37. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






38. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






39. 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.






40. [Total assets/Net Assets]






41. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






42. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






43. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






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






45. Assets = Liabilities + Net Assets (aka Equity).






46. The current traded rate for similar risk securities.






47. 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.






48. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






49. [Total Liabilities/ Net assets]






50. Service center costs are allocated to both mission centers and other service centers