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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
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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 method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
HMO
Step-down method
Net proceeds from a bond issuance
Net Assets to Total Assets
2. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Income from investments
Time value of money
Profitability ratios
Realization principle
3. The idea that a dollar today is worth more than a dollar in the future.
Cost object
Time value of money
Traditional profit centers
Properties and equipment
4. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Expense cost variance
Acid test ratio
Total revenue
Cash basis of accounting
5. [Total Liabilities/ Net assets]
Return on net assets
Non-operating expenses
Accrual basis of accounting
Debt to equity
6. Financing used expressly for the purchase of non-current assets.
Revenues
Capital financing
Opportunity cost
Cost avoidance
7. 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.
Coupon
Cash flows from investing activities
Discount rate
Average Days Inventory
8. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Days cash on hand
Other revenues
For-profit
Interest
9. Service center costs are allocated to both mission centers and other service centers
Capital
Financing activities
Capital financing
Step Down
10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Expenses
Net increase (decrease) in cash and cash equivalents
Notes payable
Issuer
11. The total amount of multiyear debt due in future years.
Collection float
Long-term debt - net of current portion
Accumulated depreciation
Statement of changes in net assets
12. A legal obligation to pay the holder of the note or lien.
ROI
Notes payable
Cash budget
Bond rating
13. Capital investment decisions designed to increase the operational capability of a health care organization.
Asset Management ratios
Cash flows from operating activities
Activity ratios
Expansion decisions
14. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Debt service coverage
Coupon rate
Prepaid assets
Market rate of interest
15. [(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
Expense volume variance
Cash flows from financing activities
Income from investments
Temporarily restricted net assets
16. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Spillover cash flows
Transaction
Top-down/bottom-up approach
Cash and cash equivalents
17. Operating income not reported elsewhere under revenues - gains - and other support.
Other income
Capital investment decisions
Not-for-profit
Other revenues
18. Stated interest rate on a bond - as promised by the issuer.
Capital structure decision
Coupon rate
Effectiveness
Accrued expenses
19. 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.
Beginning inventory
IRR
Total asset turnover
Cash flows from financing activities
20. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Operating budget
Quick ratio
Allocation base
Net patient service revenue
21. Revenues generated from an organization's operating activities.
Average payment period
Net accounts receivable
Cost of capital
Operating revenues
22. 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 activities
Statement of operations
Acid test ratio
Base Budget
23. The ease and speed with which an asset can be turned into cash.
Accounts payable
Effectiveness
Performance budget
Liquidity
24. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.
FV
Donor
Coupon payment
Bond rating agency
25. 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.
Efficiency
Float
Current liabilities
SWOT analysis
26. 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.
Amortization of a loan
Centralization
Cash and cash equivalents
Working capital
27. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Opening inventory
Cash flows from investing activities
FV
28. Revenues of the organization earned in non-healthcare related activities.
Interest
Performance measure
Capital appreciation
Non-operating revenues
29. The section of the expense budget that forecasts salary and benefits.
Fixed labor budget
Long-term investments
Performance measure
Intermediate Cost Object
30. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Operating income
Accrual basis of accounting
Properties and equipment
Financing activities
31. A budget in which line items are presented by program.
Prepaid assets
Comparative approach
Program budget
Step Down
32. 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.
Investment centers
Operating cash flows
Precautionary purposes
Bad debt
33. A situation in which if one project is implemented the other(s) will not be.
Acid test ratio
Other revenues
Mutually exclusive projects
Allocation base
34. 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.
Comparative approach
Other expenses
Collection float
Expense volume variance
35. 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.
Collateral
Budget
Line of credit
Net Assets to Total Assets
36. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Revenue rate variance
Accounts payable
Traditional profit centers
Ending inventory
37. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Net accounts receivable
Inflation
Horizontal analysis
FTE
38. Recording expenses associated with making revenue at the same time as revenues are recognized
Matching principle
Administrative cost centers
Cost of goods sold
Ratio analysis
39. 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
Financing activities
Net Assets
Discount rate
Other support
40. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Base Budget
Coupon
Cash basis of accounting
MV
41. 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?
Responsibility center
Statement of cash flows
Revenue rate variance
Other support
42. Properties and equipment less accumulated depreciation.
Responsibility center
Cash flows from operating activities
Properties and equipment - net
Effectiveness
43. The current traded rate for similar risk securities.
Dividends
Cash and cash equivalents
Retained earnings
Market rate of interest
44. Budgets that typically cover two to five years.
Multiyear budget
Net Assets to Total Assets
Revenue enhancement
Fixed asset turnover
45. 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.
Allocation base
Capital assets
Tax-exempt bonds
Fully allocated costs
46. 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.
Effectiveness
Time value of money
Net proceeds from a bond issuance
Allocation base
47. Financial and non-financial standards against which organizational performance is measured.
Program budget
Performance measure
Non-current assets
Capital budget
48. The increase in the value of an investment from the time it is purchased until the time it is sold.
Opening inventory
Assets
Traditional profit centers
Capital appreciation
49. [Total Revenues/ Total Assets]
FV
Asset Turnover Ratio
Collateral
Mail float
50. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Realization principle
Capital investment decisions
Payback
Dividends