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






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






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






4. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






5. Each service center






6. 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.






7. The cost of the supplies on hand at the beginning of the year.






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






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






10. The current traded rate for similar risk securities.






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






12. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






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






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






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






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






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






19. 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.






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






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






22. 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.






23. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






24. The budget used to forecast operating expenses.






25. [Total assets/Net Assets]






26. Portion of the profits the organization keeps in-house to use in support of its mission.






27. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






29. Financing used expressly for the purchase of non-current assets.






30. Properties and equipment less accumulated depreciation.






31. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






32. [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).






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






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






35. [(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






36. Donated assets that have restrictions on their use which will never be removed.






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






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






39. Highly liquid current assets such as interest-bearing savings and checking accounts.






40. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






41. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






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






43. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






45. 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.






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






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






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






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






50. 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