Test your basic knowledge |

ACCA Financial Management

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

2. Directly related to the purposes of the organization and the delivery of services

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

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

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

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

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

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

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

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

11. Irregular cash flows - typically occurring at the end of the life of a project.

12. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).

13. Amounts due to the organization from patients - third parties - and others.

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

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

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

17. 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.

18. Expenses of the organization incurred in non-health-care related activities.

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

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

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

22. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.

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

24. The difference between current assets and current liabilities.

25. 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.

26. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.

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

28. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.

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

30. The rise in an economy's general level of prices.

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

32. 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.

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

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

35. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.

36. Service center costs are allocated to both mission centers and other service centers

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

38. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.

39. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.

40. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.

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

42. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.

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

44. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;

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

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

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

48. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.

49. 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.

50. The degree to which standards are met.