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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 security interest in one or more assets granted to lenders in a secured loan.






2. Price times total quantity.






3. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






4. 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.






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






6. [Net Accounts Receivable/(Revenue/356)]






7. 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.






8. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






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






10. An entity that owns other companies.






11. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






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






13. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






14. Activity-based costing. A method to determine the costs of a service - product - or customer by tracing the resources consumed. ABC focuses on: I) controlling as well as calculating costs - 2) tracing as opposed to allocating costs - and 3) the impor






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






16. (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.






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






18. A note payable that has as collateral real assets and that requires periodic payments.






19. 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).






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






21. Revenues generated from an organization's operating activities.






22. The difference between current assets and current liabilities.






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






24. [Total Revenues/ Total Assets]






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






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






27. {[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).






28. 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.






29. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






30. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he






31. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






32. The bottom line in the statement of operations. It includes such items as operating and non-operating income - contributions of long-lived assets - transfers to parent - and extraordinary items.






33. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






34. 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.






35. 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.






36. The degree to which standards are met.






37. 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.






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






39. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






40. An assignment or grading of the likelihood that an organization will not default on a bond.






41. [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?






42. An estimate/measure of how much a tangible asset (such as plant or equipment) has been "used up" during an accounting period. It is an expense that does not require any cash outflow under the accrual basis of accounting. See also Accumulated deprecia






43. An entity that is owed money for lending funds or supplying goods or services on credit.






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






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






46. 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).






47. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






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






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






50. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.