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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 expenses incurred from an organization's operating activities.






2. [(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






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






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






5. 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.






6. Amounts earned by the organization from the provision of service or sale of goods.






7. The amount of time between when an organization receives a service and pays for it.






8. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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






10. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






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






12. An entity that is owed money for lending funds or supplying goods or services on credit.






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






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






15. Capital investment decisions designed to increase the operational capability of a health care organization.






16. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






17. [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).






18. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






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






20. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






22. The current traded rate for similar risk securities.






23. 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).






24. [Surplus/Operating Revenues]






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






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






27. (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






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






29. 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.






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






31. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






32. 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.






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






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






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






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






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






38. The absence of risk in an investment.






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






40. [Total Revenues/ Total Assets]






41. Price times total quantity.






42. An entity that owns other companies.






43. [Net Accounts Receivable/(Revenue/356)]






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






45. 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






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






47. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






48. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






49. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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