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






2. Financing that will be paid back in less than one year.






3. 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.






4. Non-operating income.






5. 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.






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






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






8. An investment that generates an annuity for an indefinite period of time - basically forever.






9. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






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






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






13. 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






14. 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.






15. Current assets. Net working capital equals current assets –current liabilities.






16. A certificate attached to a bond representing the amount of interest to be paid to the holder.






17. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






19. The current traded rate for similar risk securities.






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






21. An entity that owns other companies.






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






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






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






25. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






26. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






28. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






29. 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.






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






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






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






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






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






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






36. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






37. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






38. 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.






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






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






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






42. 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






43. Assets that have a useful life greater than one year - such as plant - property - and equipment. Plant and equipment are depreciated over time; land (property) is not.






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. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






46. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






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






48. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






49. 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.






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