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






2. The absence of risk in an investment.






3. (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






4. 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






5. [Total assets/Net Assets]






6. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






7. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






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






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






10. Assets that have a physical presence.






11. Capital investment decisions designed to increase an organization's strategic position.






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






13. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






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






15. 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.






16. The cost of the supplies on hand at the beginning of the year.






17. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






18. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






19. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






20. Financial obligations that will be paid off over a time period longer than one year






21. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






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






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






24. Service center costs are allocated to both mission centers and other service centers






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






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






27. 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.






28. [Surplus/Operating Revenues]






29. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






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






31. The ease and speed with which an asset can be turned into cash.






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






33. 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






34. A good or service provided in return for some type of compensation.






35. (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.






36. The difference between current assets and current liabilities.






37. 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.






38. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






39. Amounts earned by the organization from the provision of service or sale of goods.






40. The total amount of multiyear debt due in future years.






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






42. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






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






44. 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.






45. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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






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






48. 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.






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






50. 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.