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






2. An organization's financial obligations that are to be paid within one year.






3. The current traded rate for similar risk securities.






4. [(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






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






6. [(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.






7. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






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






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






10. The absence of risk in an investment.






11. 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.






12. Non-operating income.






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






14. The budget used to forecast operating expenses.






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






16. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






17. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






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






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






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






21. The resources owned by the organization. It is one of the three major categories on the balance sheet.






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






23. 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






24. (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.






25. Demonstrates the ability to pay off long term debt






26. The income (operating revenues -operating expenses) earned in non-health-care related activities.






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






28. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






29. The difference between what was planned (budgeted) and what was achieved (actual).






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






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






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






33. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






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






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






36. 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.






37. Stated interest rate on a bond - as promised by the issuer.






38. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






39. [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).






40. 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






41. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






42. Costs that are traced to a cost object. See also Indirect costs and Cost object.






43. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






44. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






45. 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.






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






47. 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.






48. The amount of time between when an organization receives a service and pays for it.






49. [(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






50. 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.