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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. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.
Restricted donation
Other expenses
Fixed (interest) rate debt
Budget
2. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Total revenue
Precautionary purposes
Incremental cash flows
Allocation base
3. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Bonds
Book value
Statement of cash flows
Capital
4. The amount of time between when an organization receives a service and pays for it.
Cash equivalents
Disbursement float
Perpetuity
Depreciation
5. [(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
Non-regular cash flows
Financing activities
Expense volume variance
Bond rating agency
6. Amounts due to the organization from patients - third parties - and others.
Net assets to total assets
Cost
Accounts receivable
Line of credit
7. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Capital structure decision
Assets
Revenues
8. 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.
Assets
Accrual basis of accounting
Bond rating agency
Non-regular cash flows
9. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Quick ratio
Coupon payment
Cost of goods sold
Operating cash flows
10. 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.
Fixed (interest) rate debt
Billing float
Capital
Inflation
11. Private entity or individual who makes a donation
Cost Accounting
Coupon
Strategic decisions
Donor
12. Stated interest rate on a bond - as promised by the issuer.
Coupon rate
Cash flows from operating activities
Collections policies and procedures
Days cash on hand
13. Expenses that have been incurred - but not yet paid.
Non-current assets
Accrued expenses
Capital assets
Disbursement float
14. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Accountability
Book value
FTE
Lender
15. Responsibility centers responsible for making a certain return on investments.
Investment centers
Administrative cost centers
FV
Activity Based Costing
16. The costs of a service after taking into account its direct and fair share of allocated costs.
Basis of Allocation
Fully allocated costs
Cost of capital
Accounts receivable
17. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Expense volume variance
Lender
Expenses
Cash flows from operating activities
18. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Mutually exclusive projects
Expense volume variance
Non-operating income
Budget variance
19. 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.
Operating activities
Long-term investments
Operating budget
Accounts receivable
20. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Common costs
Activity ratios
Line of credit
Capital budget
21. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Collateral
Float
Capital structure decision
Mortgage
22. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Administrative profit centers
Acid test ratio
Lender
23. A legal obligation to pay the holder of the note or lien.
Notes payable
Operating margin
Collection float
FTE
24. [Net Accounts Receivable/(Revenue/356)]
Mail float
Operating expenses
Average Days Receivable
Cost centers
25. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.
Revenue rate variance
Assets
Fixed costs
ABC
26. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt
Tax-exempt bonds
Coupon
Opening inventory
Non-operating revenues
27. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Accounting period
Long-term debt to net assets ratio
Operating activities
Cost object
28. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Other support
Billing - collections - and disbursement policies and procedures
Long Term Solvency ratios
Fixed costs
29. The revenue and expense budgets of an organization.
Basic accounting equation
Debt to equity
Fixed costs
Operating budget
30. The amount of supplies used to provide a service or good.
Net assets to total assets
Financing activities
Cost of goods sold
Operating budget
31. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.
Increase in unrestricted net assets
Performance measure
Investment grade
Revenue rate variance
32. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Bonds
Notes payable
FTE
33. 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.
Revenue enhancement
Ratio analysis
Effectiveness
Mortgage
34. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Capital budget
Cost of capital
Responsibility center
Net Assets to Total Assets
35. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Cost centers
Float
Periodic payments
Efficiency
36. {[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).
Service centers
Non-operating expenses
Cash flows from operating activities
Days cash on hand
37. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.
Accumulated depreciation
Activity Based Costing
Bad debt
Fixed costs
38. Revenues of the organization earned in non-healthcare related activities.
Transaction
Non-operating revenues
Balance sheet
Operating expenses
39. 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.
Realization principle
Coupon
Operating income
Statement of changes in net assets
40. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor
Cash flows from investing activities
Discount rate
Non-regular cash flows
Cost of capital
41. The increase in the value of an investment from the time it is purchased until the time it is sold.
Capital appreciation
Intermediate Cost Object
Market rate of interest
Statement of changes in net assets
42. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Product diversity
Liquidity ratios
Multiyear budget
Total asset turnover
43. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.
Cash and cash equivalents
Operating expenses
Common costs
Discounting
44. 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
Current assets
Properties and equipment
Long-term debt to net assets ratio
Notes payable
45. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?
Fixed assets
Creditor
Total asset turnover
Net Assets to Total Assets
46. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Net Assets to Total Assets
Top-down/bottom-up approach
Capital
Administrative cost centers
47. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Bad debt
Performance budget
Equity financing
Restricted donation
48. Highly liquid current assets such as interest-bearing savings and checking accounts.
Perpetuity
Cash equivalents
Incremental cash flows
Breakeven point
49. The current traded rate for similar risk securities.
Collections policies and procedures
Opening inventory
Contribution margin
Market rate of interest
50. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.
Matching principle
Revenues
Lien
Footnotes