Test your basic knowledge |

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. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






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






3. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






5. An entity that owns other companies.






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






7. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






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






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






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






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






13. Each service center






14. The cash flows derived from an organization's operating activities.






15. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.






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






17. Full-time equivalent employees. Two half-time employees equal one FTE.






18. 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.






19. [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.






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






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






22. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






23. Financial and non-financial standards against which organizational performance is measured.






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






25. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






26. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






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






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






29. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






30. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






32. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






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






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






35. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






36. 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)






37. The absence of risk in an investment.






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






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






40. 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.






41. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






42. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






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






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






45. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






46. 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.






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






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






49. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






50. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income