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






2. [Surplus/Operating Revenues]






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






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.






5. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






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






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






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






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).






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






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






12. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






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.






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






15. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






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.






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.






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.






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






20. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






21. Irregular cash flows - typically occurring at the end of the life of a project.






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






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






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






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






26. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






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.






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.






29. Non-operating 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.






31. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






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






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.






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.






35. An assignment or grading of the likelihood that an organization will not default on a bond.






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.






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






38. Price times total quantity.






39. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






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






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.






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.






43. Responsibility centers responsible for making a certain return on investments.






44. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






45. [Total Revenues/ Total Assets]






46. Directly related to the purposes of the organization and the delivery of services






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






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






49. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






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