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






2. Revenue is recorded when goods or services are delivered






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






4. 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.






5. [Surplus/Operating Revenues]






6. The difference between current assets and current liabilities.






7. Non-operating income.






8. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






9. The cost of activities that take place to produce the final cost object






10. (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






11. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






13. Supplementing traditional sources of revenue with new sources.






14. Proceeds lost by foregoing other opportunities.






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






16. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






18. Each service center






19. Financing that will be paid back in less than one year.






20. How an organization chooses to finance its working capital needs.






21. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






22. The difference between what was planned (budgeted) and what was achieved (actual).






23. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






24. 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.






25. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






26. Amounts the organization is obligated to pay others - including suppliers and creditors.






27. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






28. 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.






29. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






30. 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






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






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






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






34. [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).






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






36. Properties and equipment less accumulated depreciation.






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






38. An entity that gives capital to another entity in expectation of a financial or non-financial return.






39. The current traded rate for similar risk securities.






40. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






41. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






42. 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.






43. 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.






44. The section of the expense budget that forecasts salary and benefits.






45. 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.






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






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






48. Revenues of the organization earned in non-healthcare related activities.






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






50. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations