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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. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






2. The changes in cash resulting from the normal operating activities of the organization.






3. Each service center






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






5. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






6. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






7. 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.






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






9. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






10. An investment that generates an annuity for an indefinite period of time - basically forever.






11. [Total Revenues/ Total Assets]






12. Price times total quantity.






13. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






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






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






16. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






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






18. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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






20. 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).






21. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






22. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






23. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






24. A security interest in one or more assets granted to lenders in a secured loan.






25. Gross proceeds less the underwriter's fee and other issuance fees.






26. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






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






28. Portion of the profits the organization keeps in-house to use in support of its mission.






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






30. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






31. Operating income not reported elsewhere under revenues - gains - and other support.






32. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






33. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






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






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






36. 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






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






38. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.






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






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






41. 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.






42. Properties and equipment less accumulated depreciation.






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






44. 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






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






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






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






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






49. 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.






50. 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.