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Test your basic knowledge |
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. Revenue is recorded when goods or services are delivered
Spillover cash flows
Realization principle
Cost avoidance
Cost object
2. Financing that will be paid back in less than one year.
Short-term financing
Tax-exempt bonds
Compounding
Decentralization
3. 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
Statement of operations
Tax-exempt bonds
FTE
Present value of an annuity
4. The activities of an organization directly related to its main line of business.
Operating activities
Acid test ratio
Cash flows from investing activities
Revenues
5. 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.
Footnotes
Capital assets
Top-down/bottom-up approach
Coupon payment
6. 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.
Collection float
Debt service coverage
Non-regular cash flows
Intermediate Cost Object
7. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Operating cash flows
Ratio analysis
Incremental cash flows
Net proceeds from a bond issuance
8. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Coupon rate
Fixed Asset Turnover
Capital budget
9. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.
Breakeven point
Other expenses
Non-operating ratio
Long-term debt to net assets ratio
10. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.
Acid test ratio
Investor
Asset Turnover Ratio
ABC
11. Financing used expressly for the purchase of non-current assets.
Budget
Capital financing
Average Days Inventory
Capital appreciation
12. The ease and speed with which an asset can be turned into cash.
Parent organization
Liquidity
Fixed assets
Non-regular cash flows
13. 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
Current ratio
G & A expenses
ABC
Payback
14. [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).
Fixed Asset Turnover
Discounted cash flows
Long-term financing
Net present value
15. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.
Fixed Asset Turnover
Payback
Performance measure
Bad debt
16. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.
Increase in unrestricted net assets
Collateral
Cash budget
Fixed supplies budget
17. A situation in which if one project is implemented the other(s) will not be.
Disbursement float
Mutually exclusive projects
Administrative profit centers
Decentralization
18. Assets that have a physical presence.
Cash flows from financing activities
Lender
Tangible assets
Net proceeds from a bond issuance
19. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Direct costs
Mission Center
Net patient service revenue
Statement of operations
20. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Billing - collections - and disbursement policies and procedures
Excess of revenues over expenses
Allocation base
Properties and equipment - net
21. The changes in cash resulting from the normal operating activities of the organization.
Cash flows from operating activities
Revenue enhancement
Coupon
Traditional profit centers
22. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.
Bond rating agency
Incremental cash flows
Statement of changes in net assets
Responsibility center
23. [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.
Working capital
Operating budget
Current ratio
Accrued expenses
24. What a series of equal payments in the future is worth today taking into account the time value of money.
Lease
Responsibility center
Present value of an annuity
Allocation
25. The degree of dispersion of responsibility within an organization. See also Centralization.
Total revenue
Allocation base
Capital structure decision
Decentralization
26. Being subject to sanctions with respect to carrying out responsibilities.
Step Down
Breakeven point
Accountability
Coupon
27. Supplementing traditional sources of revenue with new sources.
Long-term financing
Revenue enhancement
Fixed assets
Other revenues
28. Directly related to the purposes of the organization and the delivery of services
Mission Center
Bond rating
Permanently restricted net assets
Ratio analysis
29. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.
Restricted donation
Common costs
Tax-exempt bonds
Non-current assets
30. The cost of activities that take place to produce the final cost object
Common costs
Intermediate Cost Object
Return on total assets
Properties and equipment - net
31. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Retained earnings
Accountability
Float
Accrual basis of accounting
32. 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.
Properties and equipment
Liquidity
Loan amortization schedule
Breakeven point
33. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;
Investment centers
Cost Accounting
Current assets
Return on net assets
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.
Allowance for uncollectibles
MV
Expenses
Budget
35. Financial and non-financial standards against which organizational performance is measured.
Cash flows from operating activities
Accountability
Performance measure
Fixed assets
36. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Asset mix
Liabilities
Spillover cash flows
Capital structure decision
37. Revenues generated from an organization's operating activities.
Expansion decisions
Loan amortization schedule
Statement of changes in net assets
Operating revenues
38. Portion of the profits the organization keeps in-house to use in support of its mission.
Operating cash flows
Retained earnings
Certainty
Financing activities
39. The total amount of multiyear debt due in future years.
Long-term debt - net of current portion
Bad debt
Long-term investments
Expenses
40. The amount of time between when an organization receives a service and pays for it.
Short-term financing
Expense cost variance
Line of credit
Disbursement float
41. {current liabilities/[(total expenses
Annuity
Activity ratios
Other revenues
Average payment period
42. 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
Present value of an annuity
Prepaid assets
Return on total assets
43. Assets = Liabilities + Net Assets (aka Equity).
Return on net assets
Allowance for uncollectibles
Basic accounting equation
Donor
44. The increase in the value of an investment from the time it is purchased until the time it is sold.
Final cost object
Operating budget
Statement of changes in net assets
Capital appreciation
45. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Responsibility center
Net patient service revenue
Annuity
Mortgage bonds
46. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Centralization
Cash budget
Other support
Cost of capital
47. Recording expenses associated with making revenue at the same time as revenues are recognized
Realization principle
Collateral
Matching principle
Perpetuity
48. The section of the expense budget that forecasts salary and benefits.
Mission Center
Activity Based Costing
Incremental cash flows
Fixed labor budget
49. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.
Operating margin
Temporarily restricted net assets
Capital financing
Fixed asset turnover
50. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Centralization
Allocation
Working capital
Capital investment decisions