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ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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.
Spillover cash flows
Donor
Investor
Financing activities
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.
Product diversity
Net Assets
Cash basis of accounting
Fixed asset turnover
3. {current liabilities/[(total expenses
Net assets released from restriction
Amortization of a loan
Operating margin
Average payment period
4. Ratios designed to answer the question: How profitable is the organization?
Net present value
Profitability ratios
Cost
Footnotes
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.
Other income
Parent organization
Float
Fixed asset turnover
6. The current traded rate for similar risk securities.
Income from investments
Other expenses
Disbursement float
Market rate of interest
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.
Coupon payment
Asset Turnover Ratio
Administrative cost centers
Non-regular cash flows
8. Financial obligations that will be paid off over a time period longer than one year
Expense volume variance
Mortgage
Non-current liabilities
Cost Accounting
9. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Investment centers
Mortgage
Bond rating agency
FTE
10. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Profitability ratios
Service centers
Net assets released from restriction
Return on total assets
11. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Permanently restricted net assets
Not-for-profit
Co-payments
Disbursement float
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.
Depreciation
Capital assets
Expansion decisions
Cash and cash equivalents
13. Assets = Liabilities + Net Assets (aka Equity).
Realization principle
Opening inventory
Coupon
Basic accounting equation
14. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Equity financing
Non-operating expenses
Present value of an annuity
Net Assets to Total Assets
15. Ratios that measure how efficiently an organization is using its assets to produce revenues.
Activity ratios
Total asset turnover
Allocation base
Cash and cash equivalents
16. A security whose interest rate does not change during the lifetime of the bond.
Fixed (interest) rate debt
Comparative approach
Operating margin
Revenue budget
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.
Net present value
Restricted donation
Allocation base
Centralization
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.
Mortgage bonds
Collections policies and procedures
Operating cash flows
Mail float
19. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Operating expenses
Periodic payments
Assets
Liquidity ratios
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.
Multiyear budget
Discounted cash flows
Operating expenses
Collections policies and procedures
21. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Step-down method
Operating activities
Allocation
Incremental cash flows
22. Series of payments over time - such as interest paid to bondholders.
Net assets released from restriction
Temporarily restricted net assets
Administrative cost centers
Periodic payments
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.
Budget
Operating activities
Accounts receivable
Loan amortization schedule
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.
Comparative approach
Accrued expenses
Investment centers
Working capital
25. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Restricted donation
Cash basis of accounting
Times interest earned
Top-down/bottom-up approach
26. The total amount of multiyear debt due in future years.
Operating income
Long-term debt - net of current portion
Mail float
Other expenses
27. The increase in the value of an investment from the time it is purchased until the time it is sold.
Expense budget
Capital appreciation
Liquidity
Excess of revenues over expenses
28. Assets that have a physical presence.
Tangible assets
Capital appreciation
Net present value
Traditional profit centers
29. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Net patient service revenue
Accrual basis of accounting
Discounted cash flows
Clinical cost centers
30. Donated assets that have restrictions on their use which will never be removed.
Net Assets
Cash equivalents
Expense volume variance
Permanently restricted net assets
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.
Net working capital
Footnotes
Tax-exempt bonds
FV
32. An entity that sells bonds in order to raise money.
Quick ratio
Issuer
Expense budget
Administrative profit centers
33. The difference between what was planned (budgeted) and what was achieved (actual).
Collection float
Deferred revenues
Other expenses
Budget variance
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
Cash flows from investing activities
Return on total assets
Step Down
G & A expenses
35. A good or service provided in return for some type of compensation.
Transaction
Realization principle
Line-item budget
Accrued expenses
36. Stated interest rate on a bond - as promised by the issuer.
Strategic planning
Coupon rate
Cost object
Investment centers
37. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Financing mix
Long Term Solvency ratios
Mission statement
For-profit
38. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Beginning inventory
Base Budget
Net accounts receivable
Revenue budget
39. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Responsibility center
Average Days Receivable
Properties and equipment
Intermediate Cost Object
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.
Line-item budget
Liquidity ratios
Expense cost variance
Mail float
41. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Line of credit
Volume diversity
Depreciation
Operating cash flows
42. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Top-down/bottom-up approach
Non-operating income
Net increase (decrease) in cash and cash equivalents
Operating income
43. What a series of equal payments in the future is worth today taking into account the time value of money.
FV
Restricted donation
Present value of an annuity
Other expenses
44. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Debt service coverage
Return on net assets
Expansion decisions
Strategic planning
45. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Net increase (decrease) in cash and cash equivalents
Precautionary purposes
Cash flows from operating activities
46. [Net Accounts Receivable/(Revenue/356)]
Budget
Average Days Receivable
Basis of Allocation
Dividends
47. Return on investment. The percentage gain or loss experienced from an investment.
Revenues
Coupon
Loan amortization schedule
ROI
48. A situation in which if one project is implemented the other(s) will not be.
Lender
Fixed supplies budget
Mutually exclusive projects
Fixed asset turnover
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.
Return on net assets
Capital assets
Excess of revenues over expenses
ABC
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.
Accountability
Coupon
Volume diversity
Return on total assets