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Test your basic knowledge |
ACCA Financial Management
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Study First
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. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Accounts receivable
Donor
Non-operating expenses
Operating margin
2. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Product diversity
Step Down
Collateral
Statement of changes in net assets
3. Directly related to the purposes of the organization and the delivery of services
Mission Center
Amortization of a loan
Efficiency
Loan amortization schedule
4. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.
Investment grade
FTE
Other support
Beginning inventory
5. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.
Ending inventory
Billing float
Administrative profit centers
Coupon rate
6. Operating income not reported elsewhere under revenues - gains - and other support.
Footnotes
Other expenses
Other revenues
Average payment period
7. 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.
Net Assets to Total Assets
Step-down method
Accountability
Activity Based Costing
8. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Non-operating income
Revenues
Disbursement float
Contribution margin
9. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).
Financing activities
Revenue budget
Current assets
Net assets to total assets
10. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Strategic decisions
Final cost object
Mortgage
Long Term Solvency ratios
11. The degree of dispersion of responsibility within an organization. See also Centralization.
Assets
Capital structure ratios
Operating budget
Decentralization
12. Stated interest rate on a bond - as promised by the issuer.
MV
Coupon rate
Long-term investments
Investor
13. The amount of time between when an organization receives a service and pays for it.
Cash equivalents
Other support
Disbursement float
Strategic financial planning
14. [Total assets/Net Assets]
Times interest earned
Leverage
Statement of operations
Properties and equipment - net
15. Responsibility centers responsible for making a certain return on investments.
Revenue rate variance
Investment centers
Effectiveness
Step-down method
16. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Controlling activities
Administrative profit centers
Coupon
Income from investments
17. 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.
Cost Accounting
Responsibility center
Capital assets
Co-payments
18. The difference between what was planned (budgeted) and what was achieved (actual).
Net assets to total assets
Horizontal analysis
Expenses
Budget variance
19. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Horizontal analysis
Net Assets to Total Assets
Budget variance
Responsibility center
20. 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.
Mission statement
Properties and equipment - net
Collections policies and procedures
Revenue budget
21. 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.
Capital financing
IRR
Ratio analysis
Expense volume variance
22. (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
Cash flows from financing activities
Non-operating income
Retained earnings
23. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Operating revenues
Liquidity ratios
Certainty
Non-current liabilities
24. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Revenues
Allowance for uncollectibles
Service centers
Working capital
25. 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.
Final cost object
Accumulated depreciation
Strategic decisions
FV
26. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Capital
Profitability ratios
Precautionary purposes
Single/Simple Step
27. 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.
Discount rate
Multiyear budget
Statement of operations
Notes payable
28. 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.
Liabilities
Responsibility center
Cash and cash equivalents
Interest
29. The changes in cash resulting from the normal operating activities of the organization.
Cash flows from operating activities
Revenue enhancement
Return on net assets
Periodic payments
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.
Expense budget
Interest
Capital structure decision
Long-term debt to net assets ratio
31. Revenues of the organization earned in non-healthcare related activities.
Creditor
Present value of an annuity
Cost avoidance
Non-operating revenues
32. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Bond rating agency
Dividends
Total revenue
Coupon payment
33. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Capital structure ratios
Notes payable
Financing activities
Administrative cost centers
34. Financing that will be paid back in less than one year.
Administrative cost centers
Matching principle
Short-term financing
Decentralization
35. 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
Line of credit
Cash flows from financing activities
Restricted donation
Not-for-profit
36. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Depreciation
Expansion decisions
Lease
Creditor
37. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.
Collection float
Cost of goods sold
Income from investments
Opportunity cost
38. 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
Breakeven point
Billing - collections - and disbursement policies and procedures
Amortization of a loan
Accountability
39. [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.
Net accounts receivable
Current ratio
Line of credit
Excess of revenues over expenses
40. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Allocation base
Precautionary purposes
Strategic planning
Notes payable
41. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Net assets released from restriction
G & A expenses
Long-term financing
Issuer
42. Service center costs are allocated to both mission centers and other service centers
Allocation base
Fixed asset turnover
Step Down
Ending inventory
43. Expenses that have been incurred - but not yet paid.
Investment centers
Assets
Accrued expenses
Footnotes
44. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.
Bonds
Total asset turnover
Non-operating ratio
G & A expenses
45. Expenses of the organization incurred in non-health-care related activities.
Acid test ratio
Disbursement float
Fixed costs
Non-operating expenses
46. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).
Liabilities
Long-term investments
Breakeven point
Bond rating
47. A method by which the organization develops its strategies and budgets to meet future financial targets.
Financing activities
Liquidity ratios
Long-term debt - net of current portion
Strategic financial planning
48. The ease and speed with which an asset can be turned into cash.
Liquidity
Step-down method
Precautionary purposes
Operating income
49. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Fully allocated costs
Base Budget
SWOT analysis
Tax-exempt bonds
50. {current liabilities/[(total expenses
Mission statement
Expense budget
Average payment period
Capital structure ratios