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






2. Proceeds lost by foregoing other opportunities.






3. Budgets that typically cover two to five years.






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






5. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






6. The degree to which standards are met.






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






8. 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.






9. Return on investment. The percentage gain or loss experienced from an investment.






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






11. 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.






12. [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.






13. Previously restricted assets no longer restricted because the terms of the restriction have been met.






14. Capital investment decisions designed to increase an organization's strategic position.






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






16. 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.






17. The difference between current assets and current liabilities.






18. [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?






19. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






20. 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.






21. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






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






23. 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).






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






25. 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.






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






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






28. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.






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






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






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






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






33. 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.






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






35. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






36. (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






37. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






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






39. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






40. 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.






41. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






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






43. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme






44. The revenue and expense budgets of an organization.






45. [(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






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






47. 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






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






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






50. 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.