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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. Full-time equivalent employees. Two half-time employees equal one FTE.






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






3. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






4. 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






5. Revenues generated from an organization's operating activities.






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






7. 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.






8. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






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






11. Gross proceeds less the underwriter's fee and other issuance fees.






12. 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.






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






14. A good or service provided in return for some type of compensation.






15. 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.






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






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






18. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






19. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






20. Expenses of the organization incurred in non-health-care related activities.






21. 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.






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






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






24. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






25. 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.






26. Amounts due to the organization from patients - third parties - and others.






27. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






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






30. [(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






31. Portion of the profits the organization keeps in-house to use in support of its mission.






32. The rise in an economy's general level of prices.






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






34. Costs that are traced to a cost object. See also Indirect costs and Cost object.






35. 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






36. 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.






37. Demonstrates the ability to pay off long term debt






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






39. (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.






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






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






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






43. [Total Revenues/ Total Assets]






44. 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).






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






46. Price times total quantity.






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






48. 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






49. [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).






50. Supplementing traditional sources of revenue with new sources.