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






2. Recording expenses associated with making revenue at the same time as revenues are recognized






3. A situation in which if one project is implemented the other(s) will not be.






4. The absence of risk in an investment.






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






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






7. [(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






8. 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.






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






10. The idea that a dollar today is worth more than a dollar in the future.






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






12. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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






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






15. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






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






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






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






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






20. 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.






21. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






22. 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.






23. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






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






25. The percentage of each asset relative to total assets.






26. The rise in an economy's general level of prices.






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






28. Ratios designed to answer the question: How profitable is the organization?






29. Private entity or individual who makes a donation






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






31. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






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






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






34. 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.






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






36. [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.






37. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






38. Supplementing traditional sources of revenue with new sources.






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






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






41. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






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






43. 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.






44. [Surplus/Operating Revenues]






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






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






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






48. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






50. 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.