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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. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






2. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






3. Revenues of the organization earned in non-healthcare related activities.






4. Financial obligations that will be paid off over a time period longer than one year






5. 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.






6. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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.






8. Responsibility centers responsible for making a certain return on investments.






9. A good or service provided in return for some type of compensation.






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






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






12. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






13. {current liabilities/[(total expenses






14. 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.






15. 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.






16. Proceeds lost by foregoing other opportunities.






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






18. Current assets. Net working capital equals current assets –current liabilities.






19. 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.






20. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






21. 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.






22. An assignment or grading of the likelihood that an organization will not default on a bond.






23. 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.






24. Capital investment decisions designed to increase the operational capability of a health care organization.






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






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






27. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






28. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






29. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






30. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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.






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






33. Price times total quantity.






34. 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.






35. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






36. 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.






37. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






38. A method by which the organization develops its strategies and budgets to meet future financial targets.






39. 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.






40. 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.






41. Operating income not reported elsewhere under revenues - gains - and other support.






42. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






44. An entity that owns other companies.






45. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






46. 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.






47. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






48. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






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






50. Directly related to the purposes of the organization and the delivery of services