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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 section of the statement of cash flows used to report such activities as borrowing and paying back loans.






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






3. {current liabilities/[(total expenses






4. Ratios designed to answer the question: How profitable is the organization?






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






6. The current traded rate for similar risk securities.






7. 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.






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






9. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






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






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






12. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






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






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






15. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






17. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






18. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






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






20. 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.






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






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






23. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






24. 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.






25. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






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






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






28. Assets that have a physical presence.






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






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






31. 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.






32. An entity that sells bonds in order to raise money.






33. The difference between what was planned (budgeted) and what was achieved (actual).






34. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






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






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






37. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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






39. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






40. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






41. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






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






44. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






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






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






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






48. A situation in which if one project is implemented the other(s) will not be.






49. 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.






50. (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.