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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. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






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






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






4. 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.






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






6. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






7. Revenue is recorded when goods or services are delivered






8. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






9. 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






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






11. What a series of equal payments in the future is worth today taking into account the time value of money.






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






13. A certificate attached to a bond representing the amount of interest to be paid to the holder.






14. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






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






16. 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?






17. Capital investment decisions designed to increase the operational capability of a health care organization.






18. The percentage of each asset relative to total assets.






19. 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.






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






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






22. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






23. Current assets. Net working capital equals current assets –current liabilities.






24. 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.






25. 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






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






27. [Surplus/Operating Revenues]






28. The current traded rate for similar risk securities.






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. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






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






33. (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.






34. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






35. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






36. The cash flows derived from an organization's operating activities.






37. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.






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






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






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






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






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






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






44. An entity that owns other companies.






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






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






47. 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.






48. 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.






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






50. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.