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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. A legal obligation to pay the holder of the note or lien.






2. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






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






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






5. 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.






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






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






8. 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.






9. 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.






10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






11. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






12. {[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).






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






14. Budgets that typically cover two to five years.






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






16. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






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






18. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






19. (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;






20. (non-operating revenues/total operating revenues)- A ratio that reflects how dependent the organization is on non-patient care related net income.






21. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






22. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).






23. [(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.






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






25. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






26. 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.






27. [Total assets/Net Assets]






28. The idea that a dollar today is worth more than a dollar in the future.






29. Financing that will be paid back in less than one year.






30. [Total Liabilities/ Net assets]






31. The purchase of assets with contributed and internally generated funds. See also Debt financing.






32. 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.






33. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






34. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?






35. Amounts earned by the organization from the provision of service or sale of goods.






36. (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.






37. The cost of activities that take place to produce the final cost object






38. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






39. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






40. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






41. 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.






42. Demonstrates the ability to pay off long term debt






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






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






45. Financial and non-financial standards against which organizational performance is measured.






46. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






47. 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






48. The elapsed time between financial statements. Common accounting periods






49. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






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