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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. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






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






4. Full-time equivalent employees. Two half-time employees equal one FTE.






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






6. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






7. 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






8. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






9. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






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






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






12. 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






13. A transaction that reduces the risk of an investment.






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






15. 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.






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






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






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






19. Proceeds lost by foregoing other opportunities.






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






21. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






22. Expenses of the organization incurred in non-health-care related activities.






23. 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






24. Ratios designed to answer the question: How profitable is the organization?






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






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






27. Budgets that typically cover two to five years.






28. 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.






29. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






30. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






31. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






32. 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






33. The rise in an economy's general level of prices.






34. 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.






35. Supplementing traditional sources of revenue with new sources.






36. 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.






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






38. A method by which the organization develops its strategies and budgets to meet future financial targets.






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






40. (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






41. The budget used to forecast operating expenses.






42. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






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






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






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






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






47. Each service center






48. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






49. [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?






50. Financing that will be paid back in less than one year.