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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. 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).






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






3. 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.






4. 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.






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






6. Revenue is recorded when goods or services are delivered






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






8. 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.






9. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






10. [Total assets/Net Assets]






11. 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.






12. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






13. A note payable that has as collateral real assets and that requires periodic payments.






14. [(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






15. 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.






16. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






17. The costs of a service after taking into account its direct and fair share of allocated costs.






18. Donated assets that have restrictions on their use which will never be removed.






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






20. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






21. 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






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






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






24. Non-operating income.






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






26. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






27. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






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






29. 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.






30. [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?






31. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






33. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.






34. 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






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






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






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






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






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






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






41. 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.






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






43. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






44. 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.






45. Revenues generated from an organization's operating activities.






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






47. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






48. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






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






50. Costs that are traced to a cost object. See also Indirect costs and Cost object.