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






2. [Surplus/Operating Revenues]






3. [Total Liabilities/ Net assets]






4. 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.






5. 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






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






7. Assets = Liabilities + Net Assets (aka Equity).






8. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






9. The activities of an organization directly related to its main line of business.






10. process of measuring the resources (costs) used to produce results.






11. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






12. 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.






13. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






14. A security whose interest rate does not change during the lifetime of the bond.






15. 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






16. 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)






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






18. A security interest in one or more assets granted to lenders in a secured loan.






19. 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.






20. [Total assets/Net Assets]






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






22. 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.






23. [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






24. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






25. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






26. The costs of a service after taking into account its direct and fair share of allocated costs.






27. 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.






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






29. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






30. Proceeds lost by foregoing other opportunities.






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






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






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






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






35. Assets that have a physical presence.






36. A transaction that reduces the risk of an investment.






37. The budget used to forecast operating expenses.






38. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






39. What a series of equal payments in the future is worth today taking into account the time value of money.






40. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






41. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






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






43. 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.






44. Supplementing traditional sources of revenue with new sources.






45. Financing used expressly for the purchase of non-current assets.






46. 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.






47. [Inventory/ (Cost of Goods Sold/365)]






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






49. The amount of supplies used to provide a service or good.






50. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.