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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 elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






2. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






3. 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.






4. [Total Revenues/ Total Assets]






5. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






6. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






7. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






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






9. 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.






10. Amounts due to the organization from patients - third parties - and others.






11. Irregular cash flows - typically occurring at the end of the life of a project.






12. The resources owned by the organization. It is one of the three major categories on the balance sheet.






13. Service center costs are allocated to both mission centers and other service centers






14. Capital investment decisions designed to increase an organization's strategic position.






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






16. 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






17. Demonstrates the ability to pay off long term debt






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






19. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






20. The income (operating revenues -operating expenses) earned in non-health-care related activities.






21. Previously restricted assets no longer restricted because the terms of the restriction have been met.






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






24. Budgets that typically cover two to five years.






25. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






26. 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.






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






28. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






29. 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.






30. 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.






31. 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.






32. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






33. An entity that owns other companies.






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






35. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.






36. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






37. 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.






38. 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)






39. [Total Liabilities/ Net assets]






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






41. 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.






42. 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






43. 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.






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






45. The cost of activities that take place to produce the final cost object






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






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






48. [Surplus/Operating Revenues]






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






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