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Test your basic knowledge |
ACCA Financial Management
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Study First
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. Amounts the organization is obligated to pay others - including suppliers and creditors.
Non-current assets
Non-operating revenues
Beginning inventory
Accounts payable
2. [Surplus/Operating Revenues]
Average Days Receivable
Revenue rate variance
Notes payable
Profit margin
3. Capital investment decisions designed to increase the operational capability of a health care organization.
Lender
Expansion decisions
Multiyear budget
Strategic planning
4. 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.
Net present value
Parent organization
Long-term financing
Service centers
5. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Collateral
Asset Management ratios
Cash equivalents
Current assets
6. 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
Inflation
Properties and equipment
Responsibility center
Non-operating revenues
7. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Accounts receivable
Market rate of interest
Administrative cost centers
Expenses
8. 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
Ending inventory
HMO
Non-operating expenses
Non-current assets
9. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).
Capital structure ratios
Fixed Asset Turnover
Other revenues
Lien
10. A transaction that reduces the risk of an investment.
Hedge
Horizontal analysis
Step-down method
Days cash on hand
11. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Step Down
Billing - collections - and disbursement policies and procedures
Net assets released from restriction
Quick ratio
12. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
HMO
Prepaid assets
Investment centers
Time value of money
13. 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.
Revenue rate variance
Return on total assets
Long-term debt to net assets ratio
Activity Based Costing
14. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.
Capital financing
For-profit
Indirect costs
Asset Turnover Ratio
15. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Step Down
Increase in unrestricted net assets
Total revenue
Efficiency
16. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.
Bond rating
Final cost object
Collection float
Expense budget
17. 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.
Line-item budget
FV
Bond rating
SWOT analysis
18. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Liabilities
Fixed labor budget
Long-term investments
Centralization
19. Series of payments over time - such as interest paid to bondholders.
MV
Performance measure
Periodic payments
Mail float
20. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
FTE
Discounting
Strategic decisions
Top-down budgeting
21. Irregular cash flows - typically occurring at the end of the life of a project.
Ratio analysis
Interest
Non-regular cash flows
Activity Based Costing
22. 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
Net Assets
Operating budget
Transaction
Revenue enhancement
23. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia
Prepaid assets
Mail float
Asset Turnover Ratio
Depreciation
24. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Accounting period
Net assets to total assets
Net patient service revenue
Intermediate Cost Object
25. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Notes payable
Revenue budget
Debt service coverage
Net assets released from restriction
26. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Fully allocated costs
Fixed assets
Parent organization
Volume diversity
27. (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.
Cost object
Return on total assets
Single/Simple Step
Tangible assets
28. 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.
Coupon payment
Parent organization
Annuity
Cost
29. Non-operating income.
Centralization
Asset mix
Accounts receivable
Other income
30. 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.
Horizontal analysis
Strategic planning
Line-item budget
Accrual basis of accounting
31. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Cost object
Program budget
Collections policies and procedures
Asset Management ratios
32. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Budget
Cost centers
Clinical cost centers
Allowance for uncollectibles
33. 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.
Depreciation
Capital investment decisions
Discounted cash flows
Net present value
34. 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.
Market rate of interest
Financing mix
Average Days Receivable
Allowance for uncollectibles
35. An assignment or grading of the likelihood that an organization will not default on a bond.
Investment grade
HMO
Non-operating income
Bond rating
36. 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.
Periodic payments
Present value of an annuity
Step Down
Capital assets
37. 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
Capital investment decisions
Net accounts receivable
Investor
Not-for-profit
38. Price times total quantity.
Total revenue
Basic accounting equation
Financing mix
Balance sheet
39. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Cost
Average Days Receivable
Temporarily restricted net assets
Statement of cash flows
40. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Non-current assets
Increase in unrestricted net assets
Product diversity
Cost avoidance
41. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Basic accounting equation
Financing activities
Mail float
Cash budget
42. 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.
Annuity
Operating income
Coupon payment
Line of credit
43. Responsibility centers responsible for making a certain return on investments.
Investment centers
Operating revenues
Liabilities
Comparative approach
44. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Opening inventory
Fixed supplies budget
Cash flows from operating activities
Restricted donation
45. [Total Revenues/ Total Assets]
Asset Turnover Ratio
Liabilities
HMO
Market rate of interest
46. Directly related to the purposes of the organization and the delivery of services
Line of credit
Mission Center
Net Assets to Total Assets
Lease
47. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Liquidity
Liquidity ratios
Issuer
Long-term investments
48. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Cost centers
Administrative cost centers
Revenues
Coupon
49. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.
Beginning inventory
FV
Donation
Volume diversity
50. The cost of the supplies on hand at the beginning of the year.
Market rate of interest
Average Days Inventory
Revenues
Opening inventory