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






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






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






4. A budget in which line items are presented by program.






5. 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.






6. 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.






7. 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.






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






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






10. The budget used to forecast operating expenses.






11. [Total assets/Net Assets]






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






13. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






14. (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






15. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






16. 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.






17. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






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






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






20. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






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






22. A situation in which if one project is implemented the other(s) will not be.






23. 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.






24. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






25. Demonstrates the ability to pay off long term debt






26. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






27. 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.






28. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






29. 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.






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






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






32. An entity that gives capital to another entity in expectation of a financial or non-financial return.






33. 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.






34. Revenues generated from an organization's operating activities.






35. 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.






36. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






37. 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).






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






39. The resources owned by the organization. It is one of the three major categories on the balance sheet.






40. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






42. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






43. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






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






45. 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.






46. 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






47. Ratios designed to answer the question: How profitable is the organization?






48. {[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).






49. [Surplus/Operating Revenues]






50. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income