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






2. [Total Revenues/ Total Assets]






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






4. The expenses incurred from an organization's operating activities.






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






6. 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.






7. 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






8. The revenue and expense budgets of an organization.






9. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






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






11. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






13. 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.






14. The degree to which standards are met.






15. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






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






17. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






18. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






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






20. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






21. Highly liquid current assets such as interest-bearing savings and checking accounts.






22. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






23. [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).






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






25. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






26. 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.






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






28. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






29. 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






30. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






31. 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






32. [(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






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






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






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






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






37. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






38. The costs of a service after taking into account its direct and fair share of allocated costs.






39. 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.






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






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






42. 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.






43. 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.






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






45. Being subject to sanctions with respect to carrying out responsibilities.






46. An assignment or grading of the likelihood that an organization will not default on a bond.






47. The activities of an organization directly related to its main line of business.






48. The amount of supplies used to provide a service or good.






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






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