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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 good or service provided in return for some type of compensation.






2. Being subject to sanctions with respect to carrying out responsibilities.






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






4. The section of the expense budget that forecasts salary and benefits.






5. 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.






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






7. 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.






8. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






9. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






10. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






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






12. Revenue is recorded when goods or services are delivered






13. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






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






15. Donated assets that have restrictions on their use which will never be removed.






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






17. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






18. 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.






19. A situation in which if one project is implemented the other(s) will not be.






20. 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.






21. 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.






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






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






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






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






26. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






27. [Total Liabilities/ Net assets]






28. 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.






29. How an organization chooses to finance its working capital needs.






30. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?






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






32. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






33. [(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






34. Amounts due to the organization from patients - third parties - and others.






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






36. Gross proceeds less the underwriter's fee and other issuance fees.






37. 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?






38. Highly liquid current assets such as interest-bearing savings and checking accounts.






39. 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.






40. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






42. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.






43. 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.






44. The increase in the value of an investment from the time it is purchased until the time it is sold.






45. 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.






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






47. Properties and equipment less accumulated depreciation.






48. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






49. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






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