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ACCA Financial Management

  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Revenue is recorded when goods or services are delivered

2. Each service center

3. The percentage of each asset relative to total assets.

4. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.

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

6. 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.

7. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.

8. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to

9. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.

10. Recording expenses associated with making revenue at the same time as revenues are recognized

11. (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

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

13. The expenses incurred from an organization's operating activities.

14. The process of distributing service center costs to mission centers - to determine the full cost of each mission center

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. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.

17. Private entity or individual who makes a donation

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

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

20. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.

21. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.

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

23. Proceeds lost by foregoing other opportunities.

24. [Total assets/Net Assets]

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

26. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.

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

28. [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?

29. Operating income not reported elsewhere under revenues - gains - and other support.

30. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.

31. {[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).

32. The degree to which standards are met.

33. [Total Liabilities/ Net assets]

34. [(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

35. 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.

36. 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.

37. Responsibility centers responsible for making a certain return on investments.

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

39. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;

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

41. [Total Revenues/ Total Assets]

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

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

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

45. 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.

46. 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.

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

48. The costs of a service after taking into account its direct and fair share of allocated costs.

49. The difference between current assets and current liabilities.

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