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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 cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






2. 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).






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.






4. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






5. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






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






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






8. 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.






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






10. 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.






11. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






12. 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.






13. The degree of dispersion of responsibility within an organization. See also Centralization.






14. 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






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






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






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






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






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






20. Proceeds lost by foregoing other opportunities.






21. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






22. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






23. [Total assets/Net Assets]






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






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






26. 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.






27. 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.






28. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






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






30. Supplementing traditional sources of revenue with new sources.






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






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






33. Amounts the organization is obligated to pay others - including suppliers and creditors.






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






35. A note payable that has as collateral real assets and that requires periodic payments.






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






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






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






39. [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.






40. 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.






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






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






43. A budget in which line items are presented by program.






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






45. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






46. Stated interest rate on a bond - as promised by the issuer.






47. Capital investment decisions designed to increase the operational capability of a health care organization.






48. 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.






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






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