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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
.
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.
Financing mix
Properties and equipment
Non-operating ratio
Asset Management ratios
2. [Total Revenues/ Total Assets]
Loan amortization schedule
Days cash on hand
Asset Turnover Ratio
Cash basis of accounting
3. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Accounts payable
Temporarily restricted net assets
Discounted cash flows
Loan amortization schedule
4. The expenses incurred from an organization's operating activities.
G & A expenses
Operating expenses
Other revenues
Clinical cost centers
5. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Accrued expenses
Non-operating expenses
Non-current assets
Basis of Allocation
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.
Current ratio
Operating income
Debt service coverage
Ratio analysis
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
Net assets released from restriction
Incremental cash flows
Return on total assets
Properties and equipment
8. The revenue and expense budgets of an organization.
Intermediate Cost Object
Capital structure decision
Present value of an annuity
Operating budget
9. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Average payment period
Capital investment decisions
Cost object
G & A expenses
10. The idea that a dollar today is worth more than a dollar in the future.
Amortization of a loan
Multiyear budget
Performance measure
Time value of money
11. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Statement of operations
Decentralization
Activity ratios
Cash basis of accounting
12. Amounts earned by the organization from the provision of service or sale of goods.
Revenues
Average Days Inventory
Capital budget
Discount rate
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.
Cash and cash equivalents
Net working capital
Horizontal analysis
Working capital
14. The degree to which standards are met.
Controlling activities
Long Term Solvency ratios
Debt to equity
Effectiveness
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.
Return on net assets
Profitability ratios
Cost
Present value of an annuity
16. An entity that is owed money for lending funds or supplying goods or services on credit.
Creditor
Final cost object
Disbursement float
Annuity
17. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
FTE
Asset Management ratios
Efficiency
Donation
18. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Financing mix
Times interest earned
Profitability ratios
19. The ease and speed with which an asset can be turned into cash.
IRR
Single/Simple Step
Revenues
Liquidity
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.
Performance budget
Non-operating expenses
Ratio analysis
Investment centers
21. Highly liquid current assets such as interest-bearing savings and checking accounts.
Billing float
Cash equivalents
IRR
Retained earnings
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.
Service centers
Times interest earned
Lender
Current ratio
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).
Coupon
Fixed Asset Turnover
Asset mix
Equity financing
24. Stated interest rate on a bond - as promised by the issuer.
Operating cash flows
Coupon rate
Accrued expenses
Income from investments
25. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Final cost object
Accrual basis of accounting
FV
Ending inventory
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.
Net present value
Net assets to total assets
IRR
Depreciation
27. An entity that sells bonds in order to raise money.
Net proceeds from a bond issuance
Average payment period
Realization principle
Issuer
28. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Incremental cash flows
Fully allocated costs
Responsibility center
Restricted donation
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
Amortization of a loan
Activity ratios
Assets
Operating income
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.
Interest
Expenses
HMO
Discounted cash flows
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
Financing mix
Not-for-profit
Annuity
Allocation base
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
Operating cash flows
Coupon
Comparative approach
Times interest earned
33. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Interest
Working capital
Donor
Liquidity ratios
34. Responsibility centers responsible for making a certain return on investments.
Permanently restricted net assets
Quick ratio
Asset mix
Investment centers
35. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Present value of an annuity
Administrative cost centers
Comparative approach
Incremental cash flows
36. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Equity financing
Tangible assets
Periodic payments
Expense cost variance
37. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Net present value
Donor
Revenue budget
38. The costs of a service after taking into account its direct and fair share of allocated costs.
Profit margin
Current ratio
Fully allocated costs
Strategic financial planning
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.
Strategic decisions
Cost avoidance
Non-current assets
Discount rate
40. Financing that will be paid back in less than one year.
Short-term financing
Mail float
SWOT analysis
Performance budget
41. Amounts the organization is obligated to pay others - including suppliers and creditors.
HMO
Cost object
Product diversity
Accounts payable
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.
Disbursement float
Capital assets
Debt service coverage
Debt to equity
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.
Non-operating revenues
Mutually exclusive projects
Non-current liabilities
Compounding
44. Capital investment decisions designed to increase the operational capability of a health care organization.
Current assets
Expansion decisions
Cash basis of accounting
FTE
45. Being subject to sanctions with respect to carrying out responsibilities.
Final cost object
Debt service coverage
Long-term investments
Accountability
46. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Asset mix
Mission Center
Operating margin
47. The activities of an organization directly related to its main line of business.
Operating activities
Fixed labor budget
Budget variance
Billing float
48. The amount of supplies used to provide a service or good.
Cost of goods sold
Temporarily restricted net assets
Discounting
Capital structure ratios
49. An investment that generates an annuity for an indefinite period of time - basically forever.
Accountability
Non-regular cash flows
Perpetuity
Non-operating income
50. What a series of equal payments in the future is worth today taking into account the time value of money.
Liabilities
Present value of an annuity
Precautionary purposes
Beginning inventory