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ACCA Financial Management

Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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






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






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. [Surplus/Operating Revenues]






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






7. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






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






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






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






11. 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






12. An entity that sells bonds in order to raise money.






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






14. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






15. Return on investment. The percentage gain or loss experienced from an investment.






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






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






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






19. 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.






20. [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?






21. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






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






24. 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.






25. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






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






27. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






28. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






30. 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.






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






32. Non-operating income.






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






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






35. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






36. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






37. 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.






38. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






39. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






41. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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






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






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






45. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






46. 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.






47. 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).






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






49. process of measuring the resources (costs) used to produce results.






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