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






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






3. Gross proceeds less the underwriter's fee and other issuance fees.






4. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






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






6. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






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






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






9. [Total Liabilities/ Net assets]






10. 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.






11. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






12. Financial and non-financial standards against which organizational performance is measured.






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






14. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






15. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






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






18. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






19. [(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






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






21. Amounts earned by the organization from the provision of service or sale of goods.






22. 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.






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






24. Price times total quantity.






25. Assets that have a physical presence.






26. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






27. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






28. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






29. 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).






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






31. [Total assets/Net Assets]






32. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






33. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






34. [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.






35. 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.






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






37. Assets = Liabilities + Net Assets (aka Equity).






38. 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






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






40. 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






41. The revenue and expense budgets of an organization.






42. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






43. 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.






44. 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.






45. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






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






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






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






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






50. 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.