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






2. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






3. An entity that owns other companies.






4. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






5. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






6. Highly liquid current assets such as interest-bearing savings and checking accounts.






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






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






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






10. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






11. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






12. 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.






13. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






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






15. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






16. [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?






17. Proceeds lost by foregoing other opportunities.






18. An entity that is owed money for lending funds or supplying goods or services on credit.






19. The elapsed time between financial statements. Common accounting periods






20. Recording expenses associated with making revenue at the same time as revenues are recognized






21. The percentage of each asset relative to total assets.






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






23. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).






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






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






26. A legal obligation to pay the holder of the note or lien.






27. 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.






28. Supplementing traditional sources of revenue with new sources.






29. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






30. Properties and equipment less accumulated depreciation.






31. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






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






33. 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.






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






35. Budgets that typically cover two to five years.






36. Price times total quantity.






37. 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.






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






39. The amount of time between when an organization receives a service and pays for it.






40. 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).






41. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






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






43. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






45. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






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. Costs that are traced to a cost object. See also Indirect costs and Cost object.






48. [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.






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






50. The expenses incurred from an organization's operating activities.