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Test your basic knowledge |
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. 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).
Deferred revenues
Coupon
Discount rate
Cash flows from investing activities
2. The total amount of multiyear debt due in future years.
Net assets released from restriction
Statement of cash flows
Discount rate
Long-term debt - net of current portion
3. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.
Payback
Discounted cash flows
Lender
Other revenues
4. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Efficiency
Net increase (decrease) in cash and cash equivalents
Depreciation
Asset Management ratios
5. An entity that owns other companies.
Amortization of a loan
Parent organization
Opportunity cost
Cash equivalents
6. A good or service provided in return for some type of compensation.
Ending inventory
Capital assets
Transaction
Bonds
7. 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
Average Days Receivable
Cost
Capital
8. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Payback
Operating income
Bonds
Non-current assets
9. An entity that sells bonds in order to raise money.
Issuer
Prepaid assets
Not-for-profit
Accumulated depreciation
10. The elapsed time between financial statements. Common accounting periods
Cash budget
Expansion decisions
Investor
Accounting period
11. Financing used expressly for the purchase of non-current assets.
Donation
Cash flows from operating activities
Accrual basis of accounting
Capital financing
12. Irregular cash flows - typically occurring at the end of the life of a project.
Expenses
Capital structure ratios
Non-regular cash flows
Strategic financial planning
13. Each service center
Single/Simple Step
Asset mix
Intermediate Cost Object
Spillover cash flows
14. The cash flows derived from an organization's operating activities.
MV
Operating cash flows
Assets
Other income
15. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
FTE
Revenues
Operating budget
Centralization
16. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.
Mission Center
Capital budget
Not-for-profit
Days cash on hand
17. Full-time equivalent employees. Two half-time employees equal one FTE.
Product diversity
FTE
FV
Bad debt
18. 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.
Transaction
Debt to equity
Bonds
Discounted cash flows
19. [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.
Non-current assets
Current ratio
Multiyear budget
Donor
20. Financial obligations that will be paid off over a time period longer than one year
Non-current liabilities
Long-term financing
Net present value
Basis of Allocation
21. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Capital assets
Volume diversity
Total asset turnover
Operating income
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
Not-for-profit
Tax-exempt bonds
Net assets to total assets
Activity ratios
23. Financial and non-financial standards against which organizational performance is measured.
Performance measure
Donor
Net patient service revenue
Net Assets
24. An entity that is owed money for lending funds or supplying goods or services on credit.
Incremental cash flows
Profitability ratios
Cash budget
Creditor
25. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
FV
Base Budget
Common costs
Footnotes
26. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Mission Center
Net Assets
Comparative approach
Efficiency
27. Assets = Liabilities + Net Assets (aka Equity).
Tax-exempt bonds
Non-regular cash flows
Cash flows from operating activities
Basic accounting equation
28. Revenues generated from an organization's operating activities.
Operating revenues
Net Assets to Total Assets
Coupon rate
Annuity
29. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Direct costs
Revenue budget
FV
Prepaid assets
30. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Temporarily restricted net assets
Ending inventory
Fixed assets
Billing - collections - and disbursement policies and procedures
31. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Fixed asset turnover
Coupon
Quick ratio
Total revenue
32. 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
Notes payable
Profit margin
Administrative profit centers
33. Highly liquid current assets such as interest-bearing savings and checking accounts.
Administrative cost centers
Cash equivalents
Fixed costs
Centralization
34. The difference between what was planned (budgeted) and what was achieved (actual).
Long-term debt - net of current portion
Investment centers
Budget variance
Decentralization
35. 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
Income from investments
Amortization of a loan
Top-down budgeting
36. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)
Cost centers
Activity ratios
Basis of Allocation
Activity Based Costing
37. The absence of risk in an investment.
Net assets to total assets
Certainty
Performance measure
Revenue budget
38. [Net Accounts Receivable/(Revenue/356)]
Non-operating ratio
Mutually exclusive projects
Average Days Receivable
Return on total assets
39. The percentage of each asset relative to total assets.
Asset mix
Bond rating
Matching principle
Indirect costs
40. 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.
Expense cost variance
Precautionary purposes
Bonds
HMO
41. 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.
Total revenue
Billing float
Accrual basis of accounting
Restricted donation
42. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Long-term debt to net assets ratio
Other support
Acid test ratio
Accrual basis of accounting
43. A transaction that reduces the risk of an investment.
Asset mix
Time value of money
Hedge
Balance sheet
44. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Current liabilities
Fully allocated costs
Mortgage
Top-down/bottom-up approach
45. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Spillover cash flows
IRR
Capital appreciation
Cash flows from financing activities
46. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Cost of capital
Net present value
SWOT analysis
Statement of operations
47. Amounts the organization is obligated to pay others - including suppliers and creditors.
Discounting
Administrative profit centers
Accounts payable
Fixed (interest) rate debt
48. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Activity Based Costing
Bond rating agency
Operating income
Volume diversity
49. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Step Down
Billing float
Budget
Allocation
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
Net accounts receivable
Statement of operations
Prepaid assets
Debt service coverage