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






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






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






4. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






5. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






6. Operating income not reported elsewhere under revenues - gains - and other support.






7. 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.






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






9. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






10. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






11. The degree of dispersion of responsibility within an organization. See also Centralization.






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






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






14. [Total assets/Net Assets]






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






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






17. 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.






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






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






20. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






21. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






22. (tax exempt revenue bonds)- Bonds in which the interest payments to the investor are exempt from the IRS. These bonds must be issued by an organization that has received tax exemption from the IRS and be used to fund projects that qualify as "exempt






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






24. 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.






25. The cumulative amount of depreciation recognized on an asset since its purchase. An asset's book value is equal to its purchase price less the amount of accumulated depreciation.






26. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.






27. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.






28. 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.






29. The changes in cash resulting from the normal operating activities of the organization.






30. 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.






31. Revenues of the organization earned in non-healthcare related activities.






32. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






33. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






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






35. 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






36. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






38. 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






39. [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.






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






41. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






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






43. Expenses that have been incurred - but not yet paid.






44. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






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






46. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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






48. The ease and speed with which an asset can be turned into cash.






49. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






50. {current liabilities/[(total expenses