Test your basic knowledge |

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






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






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






4. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






5. Properties and equipment less accumulated depreciation.






6. 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.






7. {[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).






8. The cash flows derived from an organization's operating activities.






9. 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






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






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






12. [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).






13. Supplementing traditional sources of revenue with new sources.






14. 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






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






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






17. The purchase of assets with contributed and internally generated funds. See also Debt financing.






18. Private entity or individual who makes a donation






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






20. 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.






21. 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.






22. A transaction that reduces the risk of an investment.






23. [Surplus/Operating Revenues]






24. The absence of risk in an investment.






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






26. An entity that owns other companies.






27. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






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






30. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






31. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






32. Ratios designed to answer the question: How profitable is the organization?






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






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






35. The elapsed time between financial statements. Common accounting periods






36. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






37. A security interest in one or more assets granted to lenders in a secured loan.






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






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






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






41. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






42. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






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






44. 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.






45. Assets that have a physical presence.






46. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






47. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






48. Financial obligations that will be paid off over a time period longer than one year






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






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