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






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






3. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






4. Revenue is recorded when goods or services are delivered






5. An entity that owns other companies.






6. A note payable that has as collateral real assets and that requires periodic payments.






7. 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.






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






9. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






11. The degree to which standards are met.






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






13. The absence of risk in an investment.






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






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






16. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization






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






18. 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






19. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






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






21. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






23. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






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






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






27. A budget in which line items are presented by program.






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






29. 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).






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






31. Non-operating income.






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






33. Debt to be paid off in a period longer than one year.






34. 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.






35. An organization's financial obligations that are to be paid within one year.






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






37. The rise in an economy's general level of prices.






38. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






39. 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.






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






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






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






43. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






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






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






46. 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)






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






48. {[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).






49. 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.






50. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.