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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. Non-operating income.






2. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






3. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






4. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






5. Each service center






6. A security interest in one or more assets granted to lenders in a secured loan.






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






8. 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.






9. Debt to be paid off in a period longer than one year.






10. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






11. 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.






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






13. 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.






14. The percentage of each asset relative to total assets.






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






16. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






19. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






20. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






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






22. 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.






23. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






25. Revenue is recorded when goods or services are delivered






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






28. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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






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






31. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






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






33. Donated assets that have restrictions on their use which will never be removed.






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






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






36. 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






37. Previously restricted assets no longer restricted because the terms of the restriction have been met.






38. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.






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






40. The cash flows derived from an organization's operating activities.






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






42. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






43. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






44. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






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






46. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






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






48. [Net Accounts Receivable/(Revenue/356)]






49. The difference between current assets and current liabilities.






50. Supplementing traditional sources of revenue with new sources.