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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. A transaction that reduces the risk of an investment.






2. 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.






3. 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)






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






5. The degree of dispersion of responsibility within an organization. See also Centralization.






6. {current liabilities/[(total expenses






7. The section of the expense budget that forecasts salary and benefits.






8. 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






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






10. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






11. 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.






12. Financing that will be paid back in less than one year.






13. [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.






14. Supplementing traditional sources of revenue with new sources.






15. Gross proceeds less the underwriter's fee and other issuance fees.






16. Assets that have a physical presence.






17. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






18. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






19. The increase in the value of an investment from the time it is purchased until the time it is sold.






20. Portion of the profits the organization keeps in-house to use in support of its mission.






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






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






23. 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.






24. Amounts the organization is obligated to pay others - including suppliers and creditors.






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






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






27. 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.






28. Properties and equipment less accumulated depreciation.






29. Series of payments over time - such as interest paid to bondholders.






30. The absence of risk in an investment.






31. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






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






33. [Total Revenues/ Total Assets]






34. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






35. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






36. 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.






37. The changes in cash resulting from the normal operating activities of the organization.






38. Amounts earned by the organization from the provision of service or sale of goods.






39. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






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






41. 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.






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






43. 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






44. Return on investment. The percentage gain or loss experienced from an investment.






45. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






46. The total amount of multiyear debt due in future years.






47. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






48. [Total assets/Net Assets]






49. 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.






50. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo