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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. The amount of supplies used to provide a service or good.






2. The difference between current assets and current liabilities.






3. The activities of an organization directly related to its main line of business.






4. 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






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






6. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






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






8. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






9. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






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






11. 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.






12. Supplementing traditional sources of revenue with new sources.






13. 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.






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






15. 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.






16. Capital investment decisions designed to increase an organization's strategic position.






17. (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






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






19. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






20. 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.






21. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






22. 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).






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






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






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






26. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






27. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






28. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






31. Financial and non-financial standards against which organizational performance is measured.






32. An organization's financial obligations that are to be paid within one year.






33. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






34. Irregular cash flows - typically occurring at the end of the life of a project.






35. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






36. A security whose interest rate does not change during the lifetime of the bond.






37. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






39. Budgets that typically cover two to five years.






40. An assignment or grading of the likelihood that an organization will not default on a bond.






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






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






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






44. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






45. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






46. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






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






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






49. 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






50. Proceeds lost by foregoing other opportunities.