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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. IA category of non-current assets not intended to be used for operations - but only for capital appreciation and dividends - and that will be held for a period longer than one year.
Comparative approach
Long-term investments
Incremental cash flows
Lender
2. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Accrued expenses
Co-payments
Footnotes
Traditional profit centers
3. Highly liquid current assets such as interest-bearing savings and checking accounts.
Debt service coverage
Balance sheet
Statement of operations
Cash equivalents
4. An investment that generates an annuity for an indefinite period of time - basically forever.
Hedge
Perpetuity
Debt service coverage
Average Days Inventory
5. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).
Long Term Solvency ratios
Equity financing
Fixed supplies budget
Lien
6. The ease and speed with which an asset can be turned into cash.
Collections policies and procedures
Liquidity
Debt service coverage
Accounting period
7. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Non-operating expenses
Quick ratio
Billing - collections - and disbursement policies and procedures
Accumulated depreciation
8. An entity that owns other companies.
Interest
Cost of goods sold
Parent organization
Bonds
9. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Lease
Net assets released from restriction
Long-term investments
Debt service coverage
10. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Accrual basis of accounting
Long-term financing
Activity ratios
Capital
11. (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.
Return on total assets
Current assets
Operating activities
Cost
12. 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.
Dividends
Average Days Inventory
Payback
Cash flows from investing activities
13. 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.
Disbursement float
Long-term debt to net assets ratio
Cash budget
Quick ratio
14. A certificate attached to a bond representing the amount of interest to be paid to the holder.
Coupon
Revenues
Payback
Clinical cost centers
15. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.
Volume diversity
FV
Mail float
Budget
16. A method by which the organization develops its strategies and budgets to meet future financial targets.
Other revenues
Retained earnings
Prepaid assets
Strategic financial planning
17. Series of payments over time - such as interest paid to bondholders.
Periodic payments
Contribution margin
Incremental cash flows
Statement of changes in net assets
18. [Total assets/Net Assets]
Traditional profit centers
Capital appreciation
Indirect costs
Leverage
19. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Collections policies and procedures
Balance sheet
Perpetuity
Final cost object
20. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Activity ratios
Cost of goods sold
Fixed asset turnover
Cash basis of accounting
21. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).
Step Down
Quick ratio
Deferred revenues
Periodic payments
22. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Days cash on hand
Allocation
Efficiency
Profitability ratios
23. The absence of risk in an investment.
Notes payable
Certainty
Line-item budget
Short-term financing
24. Being subject to sanctions with respect to carrying out responsibilities.
Accountability
Financing mix
Certainty
Expenses
25. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.
Statement of changes in net assets
Strategic planning
Administrative cost centers
Operating income
26. Revenues of the organization earned in non-healthcare related activities.
Non-operating revenues
Mortgage bonds
Administrative profit centers
Fixed costs
27. Proceeds lost by foregoing other opportunities.
Contribution margin
Non-operating revenues
Return on net assets
Opportunity cost
28. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Administrative cost centers
Revenue enhancement
Operating revenues
Fixed (interest) rate debt
29. 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
Assets
Balance sheet
Statement of operations
Book value
30. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.
Transaction
Cost object
For-profit
Total revenue
31. 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.
Present value of an annuity
Basic accounting equation
Performance budget
Lien
32. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.
Co-payments
Net assets to total assets
Cost of capital
Billing float
33. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Controlling activities
Long-term investments
SWOT analysis
Base Budget
34. Properties and equipment less accumulated depreciation.
Capital budget
Properties and equipment - net
Periodic payments
Accounts receivable
35. Stated interest rate on a bond - as promised by the issuer.
Indirect costs
Coupon rate
Statement of operations
Total asset turnover
36. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Average payment period
Net Assets to Total Assets
Asset Management ratios
Return on total assets
37. A note payable that has as collateral real assets and that requires periodic payments.
Creditor
Mortgage
Non-operating expenses
Centralization
38. Financing that will be paid back in less than one year.
Revenue enhancement
Short-term financing
Effectiveness
Expense cost variance
39. The increase in the value of an investment from the time it is purchased until the time it is sold.
Direct costs
Lender
Capital appreciation
Comparative approach
40. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Average Days Inventory
Beginning inventory
Basis of Allocation
Certainty
41. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.
Mission statement
SWOT analysis
Direct costs
Line-item budget
42. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income
Operating margin
Net increase (decrease) in cash and cash equivalents
Compounding
Debt service coverage
43. The changes in cash resulting from the normal operating activities of the organization.
Current assets
Accountability
Present value of an annuity
Cash flows from operating activities
44. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Long Term Solvency ratios
G & A expenses
Operating margin
Donor
45. 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.
Accrual basis of accounting
Administrative profit centers
Centralization
Current liabilities
46. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Collection float
Capital structure decision
Intermediate Cost Object
Profit margin
47. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Capital appreciation
Book value
Decentralization
Long-term investments
48. 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.
Parent organization
Certainty
Common costs
Fixed (interest) rate debt
49. The section of the expense budget that forecasts salary and benefits.
Fixed labor budget
Capital appreciation
Line of credit
Activity Based Costing
50. 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.
Prepaid assets
Disbursement float
Allocation base
Centralization