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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 idea that a dollar today is worth more than a dollar in the future.






2. Expenses that have been incurred - but not yet paid.






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






4. 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.






5. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






6. The increase in the value of an investment from the time it is purchased until the time it is sold.






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






8. 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.






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






10. 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.






11. The amount of supplies used to provide a service or good.






12. 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






13. The absence of risk in an investment.






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






15. The activities of an organization directly related to its main line of business.






16. [Inventory/ (Cost of Goods Sold/365)]






17. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






18. 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.






19. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






20. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






21. 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.






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






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






24. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






25. Return on investment. The percentage gain or loss experienced from an investment.






26. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






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






28. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






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






30. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






31. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






32. The elapsed time between financial statements. Common accounting periods






33. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






34. Previously restricted assets no longer restricted because the terms of the restriction have been met.






35. Highly liquid current assets such as interest-bearing savings and checking accounts.






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






37. [Net Accounts Receivable/(Revenue/356)]






38. Assets = Liabilities + Net Assets (aka Equity).






39. 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.






40. Amounts due to the organization from patients - third parties - and others.






41. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






42. Each service center






43. Being subject to sanctions with respect to carrying out responsibilities.






44. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






45. process of measuring the resources (costs) used to produce results.






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






47. 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.






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






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






50. 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.