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






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






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






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






5. Recording expenses associated with making revenue at the same time as revenues are recognized






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






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






8. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






9. Portion of the profits the organization keeps in-house to use in support of its mission.






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






11. A certificate attached to a bond representing the amount of interest to be paid to the holder.






12. The budget used to forecast operating expenses.






13. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






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






15. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






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






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






18. 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.






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






20. [(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






21. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.






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






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. The absence of risk in an investment.






25. Full-time equivalent employees. Two half-time employees equal one FTE.






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






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






28. 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






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






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






31. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.






32. Current assets. Net working capital equals current assets –current liabilities.






33. 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.






34. 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






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






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






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






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






39. 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.






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






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






42. 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.






43. {[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).






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






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






46. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






47. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






48. Proceeds lost by foregoing other opportunities.






49. An entity that sells bonds in order to raise money.






50. 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