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Test your basic knowledge |
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. The idea that a dollar today is worth more than a dollar in the future.
Financing mix
Fixed asset turnover
Time value of money
Permanently restricted net assets
2. Proceeds lost by foregoing other opportunities.
Opportunity cost
Operating activities
Final cost object
Operating budget
3. Budgets that typically cover two to five years.
Indirect costs
Notes payable
Multiyear budget
Asset Management ratios
4. Amounts due to the organization from patients - third parties - and others.
Mortgage bonds
Precautionary purposes
Accounts receivable
Investment centers
5. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Current liabilities
Donation
Bond rating agency
Breakeven point
6. The degree to which standards are met.
Liquidity ratios
Beginning inventory
Balance sheet
Effectiveness
7. Costs that are traced to a cost object. See also Indirect costs and Cost object.
Strategic financial planning
Direct costs
Cash and cash equivalents
Opportunity cost
8. 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.
Billing - collections - and disbursement policies and procedures
Assets
Step-down method
Horizontal analysis
9. Return on investment. The percentage gain or loss experienced from an investment.
ROI
Return on net assets
Mortgage bonds
Responsibility center
10. [Net Accounts Receivable/(Revenue/356)]
Cash equivalents
Annuity
Lien
Average Days Receivable
11. 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.
Long-term financing
Allocation base
Product diversity
Current assets
12. [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.
Bad debt
Current ratio
Net increase (decrease) in cash and cash equivalents
Cash flows from operating activities
13. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Step Down
Properties and equipment - net
Net assets released from restriction
Indirect costs
14. Capital investment decisions designed to increase an organization's strategic position.
Strategic decisions
Tax-exempt bonds
Return on total assets
Contribution margin
15. A legal obligation to pay the holder of the note or lien.
Net Assets
Notes payable
Cost object
G & A expenses
16. 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.
Strategic decisions
Product diversity
Precautionary purposes
Performance budget
17. The difference between current assets and current liabilities.
Cash basis of accounting
Deferred revenues
Contribution margin
Net working capital
18. [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?
Ratio analysis
Total asset turnover
Annuity
Accounting period
19. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Cost avoidance
Tangible assets
Cost centers
Return on net assets
20. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Discount rate
Bad debt
Net increase (decrease) in cash and cash equivalents
Top-down budgeting
21. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Quick ratio
Revenue budget
For-profit
Asset mix
22. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Days cash on hand
Parent organization
Expenses
Average Days Inventory
23. 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).
Clinical cost centers
Deferred revenues
Cash budget
Creditor
24. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Direct costs
Temporarily restricted net assets
Current ratio
Comparative approach
25. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Mission statement
Operating activities
Non-operating expenses
Ratio analysis
26. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Average payment period
Controlling activities
Efficiency
Tax-exempt bonds
27. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
Accumulated depreciation
Program budget
Accounts payable
28. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Beginning inventory
Bond rating
Transaction
Realization principle
29. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Net Assets to Total Assets
Expense cost variance
Lender
Revenue budget
30. The amount of time between when an organization receives a service and pays for it.
Budget variance
Disbursement float
Non-operating revenues
Discounting
31. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Basis of Allocation
Issuer
Average Days Inventory
Restricted donation
32. The changes in cash resulting from the normal operating activities of the organization.
Cash basis of accounting
Cash flows from investing activities
Accrual basis of accounting
Cash flows from operating activities
33. 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.
Cash flows from investing activities
Administrative cost centers
Capital assets
Net present value
34. The costs of a service after taking into account its direct and fair share of allocated costs.
Retained earnings
Quick ratio
Present value of an annuity
Fully allocated costs
35. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Coupon
Debt to equity
Spillover cash flows
Ratio analysis
36. (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
Tax-exempt bonds
Liquidity ratios
Centralization
Cash budget
37. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Acid test ratio
Traditional profit centers
Realization principle
Net present value
38. Highly liquid current assets such as interest-bearing savings and checking accounts.
Non-operating income
Times interest earned
Horizontal analysis
Cash equivalents
39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Cost of capital
Present value of an annuity
Liquidity ratios
Average Days Inventory
40. 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.
Increase in unrestricted net assets
Fully allocated costs
Average Days Receivable
Strategic financial planning
41. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Expenses
Ending inventory
Non-operating expenses
Return on total assets
42. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Non-operating expenses
Fixed assets
Cash basis of accounting
Contribution margin
43. 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
Days cash on hand
Expenses
Statement of operations
Activity Based Costing
44. The revenue and expense budgets of an organization.
Operating budget
Leverage
Current ratio
Accounting period
45. [(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
Accounting period
Times interest earned
Debt service coverage
Long Term Solvency ratios
46. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
Line of credit
Discounting
Other expenses
Opportunity cost
47. I) Organizations that have a special designation because they provide goods or services that result in needed community benefit. In turn - such organizations are not required to pay most taxes. 2) The designation of an organization as one that is not
Not-for-profit
Short-term financing
Activity ratios
Mission statement
48. The difference between what was planned (budgeted) and what was achieved (actual).
Permanently restricted net assets
Efficiency
Net working capital
Budget variance
49. The ease and speed with which an asset can be turned into cash.
Times interest earned
Decentralization
Opportunity cost
Liquidity
50. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Transaction
Collateral
Accrual basis of accounting
Long Term Solvency ratios