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Test your basic knowledge |
ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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 elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Mail float
Coupon payment
Co-payments
Average Days Receivable
2. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Fixed asset turnover
Step-down method
Mission Center
Clinical cost centers
3. 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.
Accounting period
Comparative approach
Incremental cash flows
Notes payable
4. [Total Revenues/ Total Assets]
Time value of money
Capital structure decision
Discount rate
Asset Turnover Ratio
5. 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.
Allowance for uncollectibles
Cash flows from financing activities
Bonds
Fixed assets
6. 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.
Liabilities
Non-operating income
FV
Net assets to total assets
7. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Collateral
Expense cost variance
Non-operating income
Annuity
8. The costs of a service after taking into account its direct and fair share of allocated costs.
Breakeven point
Fully allocated costs
Fixed asset turnover
ROI
9. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Interest
Float
Tax-exempt bonds
Investment centers
10. Amounts due to the organization from patients - third parties - and others.
Net Assets
Collection float
Ending inventory
Accounts receivable
11. Irregular cash flows - typically occurring at the end of the life of a project.
Mortgage bonds
Product diversity
Non-regular cash flows
Other expenses
12. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Amortization of a loan
Balance sheet
Revenues
13. Service center costs are allocated to both mission centers and other service centers
Step Down
Cash flows from investing activities
Collateral
Beginning inventory
14. Capital investment decisions designed to increase an organization's strategic position.
Net working capital
MV
Administrative cost centers
Strategic decisions
15. [Inventory/ (Cost of Goods Sold/365)]
Line-item budget
Coupon rate
Average Days Inventory
Capital budget
16. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach
FV
Accounting period
Top-down budgeting
Periodic payments
17. Demonstrates the ability to pay off long term debt
Bond rating agency
Properties and equipment
Long Term Solvency ratios
Expense volume variance
18. [Net Accounts Receivable/(Revenue/356)]
Assets
Mortgage bonds
MV
Average Days Receivable
19. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?
Statement of cash flows
Revenue budget
Revenue rate variance
Revenue enhancement
20. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Other expenses
Non-operating income
Profit margin
Contribution margin
21. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Non-operating revenues
Net assets released from restriction
Financing activities
Step Down
22. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Service centers
Fixed Asset Turnover
Fixed asset turnover
Expense volume variance
23. Current assets. Net working capital equals current assets –current liabilities.
Bonds
Working capital
Investment grade
Footnotes
24. Budgets that typically cover two to five years.
Mortgage bonds
Allocation
Multiyear budget
Line of credit
25. [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?
Activity Based Costing
Budget
Billing - collections - and disbursement policies and procedures
Total asset turnover
26. 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.
Cash flows from operating activities
Base Budget
Common costs
Mail float
27. Financing that will be paid back in less than one year.
Short-term financing
Properties and equipment
Permanently restricted net assets
Single/Simple Step
28. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Average Days Inventory
Asset Management ratios
Mortgage bonds
Depreciation
29. 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.
Capital assets
Cash flows from financing activities
Days cash on hand
Financing mix
30. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Collection float
Other income
Operating income
Co-payments
31. 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.
Fixed supplies budget
Fixed asset turnover
Expenses
Compounding
32. 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).
Current ratio
Fixed supplies budget
Restricted donation
Cash flows from financing activities
33. An entity that owns other companies.
Restricted donation
Parent organization
Fixed Asset Turnover
Average Days Inventory
34. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Bond rating agency
Issuer
Dividends
Intermediate Cost Object
35. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Long-term investments
Net Assets
Net Assets to Total Assets
Incremental cash flows
36. 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.
Line of credit
Activity ratios
Coupon rate
Traditional profit centers
37. 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.
Interest
Mission statement
Ending inventory
Activity ratios
38. 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)
Mission statement
Discounted cash flows
Basis of Allocation
Working capital
39. [Total Liabilities/ Net assets]
Payback
Debt to equity
Capital structure decision
Acid test ratio
40. An assignment or grading of the likelihood that an organization will not default on a bond.
Financing mix
Bond rating
Performance measure
Bonds
41. 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.
Income from investments
Notes payable
Loan amortization schedule
ABC
42. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme
Operating cash flows
Bond rating agency
Revenues
Statement of operations
43. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Accrual basis of accounting
Net patient service revenue
Ending inventory
G & A expenses
44. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Prepaid assets
Precautionary purposes
Operating margin
Final cost object
45. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Temporarily restricted net assets
Operating cash flows
HMO
46. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Current liabilities
Responsibility center
Liquidity ratios
Revenue budget
47. Assets = Liabilities + Net Assets (aka Equity).
Budget variance
Basic accounting equation
Average payment period
Debt service coverage
48. [Surplus/Operating Revenues]
Transaction
Line of credit
Long-term debt - net of current portion
Profit margin
49. Literally non-movable assets. Generally used to refer to buildings and equipment.
Footnotes
Average Days Inventory
Cash equivalents
Fixed assets
50. The section of the expense budget that forecasts salary and benefits.
Activity ratios
Basis of Allocation
Cash and cash equivalents
Fixed labor budget