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. {[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).






2. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






3. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






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






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






6. Revenues of the organization earned in non-healthcare related activities.






7. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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






9. 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.






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






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






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






13. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






14. 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)






15. 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.






16. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






17. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






18. 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






19. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






20. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






21. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.






22. {current liabilities/[(total expenses






23. Demonstrates the ability to pay off long term debt






24. An entity that gives capital to another entity in expectation of a financial or non-financial return.






25. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






26. Recording expenses associated with making revenue at the same time as revenues are recognized






27. How an organization chooses to finance its working capital needs.






28. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






29. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






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






31. 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.






32. Properties and equipment less accumulated depreciation.






33. Series of payments over time - such as interest paid to bondholders.






34. An assignment or grading of the likelihood that an organization will not default on a bond.






35. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






36. Literally non-movable assets. Generally used to refer to buildings and equipment.






37. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






38. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






39. The degree to which standards are met.






40. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






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






42. The revenue and expense budgets of an organization.






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






44. The purchase of assets with contributed and internally generated funds. See also Debt financing.






45. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






46. The section of the expense budget that forecasts salary and benefits.






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






48. [Surplus/Operating Revenues]






49. 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.






50. 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.