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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. 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.






2. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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






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






5. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






6. The ease and speed with which an asset can be turned into cash.






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






8. An entity that owns other companies.






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






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






11. (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.






12. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






13. 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.






14. A certificate attached to a bond representing the amount of interest to be paid to the holder.






15. 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.






16. A method by which the organization develops its strategies and budgets to meet future financial targets.






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






18. [Total assets/Net Assets]






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






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






21. 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).






22. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






23. The absence of risk in an investment.






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






25. 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.






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






27. Proceeds lost by foregoing other opportunities.






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






29. 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






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






31. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






32. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






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






34. Properties and equipment less accumulated depreciation.






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






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






37. A note payable that has as collateral real assets and that requires periodic payments.






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






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






40. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






41. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






42. [(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






43. The changes in cash resulting from the normal operating activities of the organization.






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






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.






46. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






48. 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.






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






50. 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.