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ACCA Financial Management
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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. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Days cash on hand
Traditional profit centers
Base Budget
Basic accounting equation
2. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Cash equivalents
Accrual basis of accounting
Capital assets
Cost object
3. 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.
Ratio analysis
Horizontal analysis
Excess of revenues over expenses
Allowance for uncollectibles
4. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Operating income
Long-term financing
Leverage
Collateral
5. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Common costs
Final cost object
Net accounts receivable
Cash flows from investing activities
6. Revenues of the organization earned in non-healthcare related activities.
Accounts payable
Restricted donation
Final cost object
Non-operating revenues
7. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Financing activities
Volume diversity
Common costs
Allowance for uncollectibles
8. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Spillover cash flows
Capital budget
Capital structure decision
Operating cash flows
9. 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.
Volume diversity
Asset mix
Line-item budget
Activity Based Costing
10. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
SWOT analysis
Ending inventory
Breakeven point
HMO
11. A security interest in one or more assets granted to lenders in a secured loan.
Lien
Net patient service revenue
Capital appreciation
Net working capital
12. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Asset Turnover Ratio
Basis of Allocation
Budget variance
G & A expenses
13. 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.
Collections policies and procedures
Non-operating income
Decentralization
Common costs
14. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)
Liquidity
Non-current liabilities
Accrued expenses
Basis of Allocation
15. 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.
Debt service coverage
Step-down method
Payback
Strategic decisions
16. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization
Tangible assets
Non-current liabilities
Times interest earned
Expenses
17. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b
Contribution margin
Net Assets
Precautionary purposes
Long Term Solvency ratios
18. 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
Cash flows from investing activities
Average Days Receivable
Non-operating expenses
Acid test ratio
19. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Clinical cost centers
Capital structure ratios
Budget variance
Program budget
20. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Capital investment decisions
Matching principle
Administrative cost centers
Loan amortization schedule
21. 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.
Parent organization
Donor
Interest
Bad debt
22. {current liabilities/[(total expenses
Average payment period
Cash basis of accounting
Certainty
Bad debt
23. Demonstrates the ability to pay off long term debt
Dividends
Cost of capital
Allocation
Long Term Solvency ratios
24. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Investor
Activity Based Costing
Issuer
Profit margin
25. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Bond rating
Beginning inventory
Budget
Long Term Solvency ratios
26. Recording expenses associated with making revenue at the same time as revenues are recognized
Capital structure decision
Average Days Receivable
Matching principle
Comparative approach
27. How an organization chooses to finance its working capital needs.
Financing mix
Non-operating income
Capital assets
Current assets
28. 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
Cost object
ABC
Financing mix
Allocation
29. 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
Multiyear budget
Accumulated depreciation
Properties and equipment
Net increase (decrease) in cash and cash equivalents
30. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Cost
Amortization of a loan
Mortgage bonds
Spillover cash flows
31. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Financing mix
Time value of money
Parent organization
Comparative approach
32. Properties and equipment less accumulated depreciation.
Base Budget
Other income
Cost of capital
Properties and equipment - net
33. Series of payments over time - such as interest paid to bondholders.
Non-operating revenues
Bonds
Periodic payments
Top-down budgeting
34. An assignment or grading of the likelihood that an organization will not default on a bond.
Bond rating
Cost avoidance
G & A expenses
Current liabilities
35. 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.
Non-operating revenues
Creditor
Short-term financing
Service centers
36. Literally non-movable assets. Generally used to refer to buildings and equipment.
Bonds
Operating revenues
Periodic payments
Fixed assets
37. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.
Expense cost variance
Mission statement
Donor
Debt to equity
38. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.
Investment grade
Income from investments
Cash flows from financing activities
Asset mix
39. The degree to which standards are met.
Market rate of interest
Profit margin
Effectiveness
Cost centers
40. 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.
Balance sheet
Breakeven point
Long-term debt - net of current portion
Revenues
41. A budget in which line items are presented by program.
Non-operating ratio
Program budget
Service centers
Strategic financial planning
42. The revenue and expense budgets of an organization.
Basis of Allocation
Perpetuity
Fixed asset turnover
Operating budget
43. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Top-down/bottom-up approach
ABC
Average payment period
Non-operating income
44. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Ending inventory
Equity financing
Billing float
Top-down/bottom-up approach
45. 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.
Top-down/bottom-up approach
Operating expenses
Float
Strategic decisions
46. The section of the expense budget that forecasts salary and benefits.
Performance budget
Non-current liabilities
Other expenses
Fixed labor budget
47. Amounts the organization is obligated to pay others - including suppliers and creditors.
Temporarily restricted net assets
Current assets
Net assets to total assets
Accounts payable
48. [Surplus/Operating Revenues]
Capital investment decisions
Fixed costs
Profit margin
Amortization of a loan
49. 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.
Lender
IRR
Ratio analysis
Cost avoidance
50. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.
Investor
Short-term financing
Lease
Strategic financial planning