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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. 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






2. 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.






3. (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






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






5. The cash flows derived from an organization's operating activities.






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






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






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






9. 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.






10. [Total Revenues/ Total Assets]






11. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






12. [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?






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






14. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






15. Price times total quantity.






16. The process of distributing service center costs to mission centers - to determine the full cost of each mission center






17. The amount of the total revenue variance that occurs because the actual average rate charged varies from that originally budgeted. It can be calculated using the formula: (actual rate -budgeted rate) x actual volume.






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






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






20. The revenue and expense budgets of an organization.






21. Properties and equipment less accumulated depreciation.






22. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






23. 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.






24. 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.






25. The cost of the supplies on hand at the beginning of the year.






26. 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.






27. 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.






28. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.






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






30. 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.






31. Budgets that typically cover two to five years.






32. 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.






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






34. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






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






36. {[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).






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






38. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations






39. [Surplus/Operating Revenues]






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






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






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






43. [Inventory/ (Cost of Goods Sold/365)]






44. 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.






45. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






46. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






47. 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.






48. 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.






49. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






50. 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.