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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. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






2. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






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






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






5. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and






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






7. [Total Revenues/ Total Assets]






8. 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.






9. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






10. 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.






11. Private entity or individual who makes a donation






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






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






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






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






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






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






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






19. 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.






20. Ratios that measure how efficiently an organization is using its assets to produce revenues.






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






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






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






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






25. 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.






26. (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






27. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.






28. 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.






29. The revenue and expense budgets of an organization.






30. The amount of supplies used to provide a service or good.






31. 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.






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






33. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






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






35. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






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. 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.






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






39. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






40. 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






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






42. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.






43. 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.






44. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






45. [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?






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






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






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






49. The current traded rate for similar risk securities.






50. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.