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






2. [(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






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






4. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






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






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






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






8. (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






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






10. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






11. An entity that owns other companies.






12. The income (operating revenues -operating expenses) earned in non-health-care related activities.






13. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






14. 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.






15. 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.






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






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






18. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






19. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






20. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






21. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






22. Properties and equipment less accumulated depreciation.






23. 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.






24. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






26. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






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






28. 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.






29. Revenue is recorded when goods or services are delivered






30. 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.






31. [Total assets/Net Assets]






32. 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.






33. A note payable that has as collateral real assets and that requires periodic payments.






34. 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.






35. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






37. Financing used expressly for the purchase of non-current assets.






38. {current liabilities/[(total expenses






39. Demonstrates the ability to pay off long term debt






40. 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.






41. 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.






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






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






44. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






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






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






47. 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.






48. 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.






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






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