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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 section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






2. 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.






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






4. 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.






5. The revenue and expense budgets of an organization.






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






7. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






8. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






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






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






11. [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.






12. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






13. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






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






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






16. 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.






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






18. An entity that gives capital to another entity in expectation of a financial or non-financial return.






19. 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.






20. Budgets that typically cover two to five years.






21. 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.






22. {current liabilities/[(total expenses






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






24. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not






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?






26. 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?






27. A transaction that reduces the risk of an investment.






28. [(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






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






30. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






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






33. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






35. 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.






36. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






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






38. Capital investment decisions designed to increase an organization's strategic position.






39. 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.






40. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






41. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






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






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






44. Properties and equipment less accumulated depreciation.






45. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






46. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






47. Revenues of the organization earned in non-healthcare related activities.






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






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






50. 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.