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






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






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






4. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






6. The activities of an organization directly related to its main line of business.






7. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.






8. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






9. 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.






10. [Total Revenues/ Total Assets]






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






12. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






13. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






14. process of measuring the resources (costs) used to produce results.






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






16. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






17. 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.






18. Operating income not reported elsewhere under revenues - gains - and other support.






19. Cash inflows and outflows resulting from financing activities - such as obtaining grants or endowments - or from borrowing or paying back long-term debt.






20. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






21. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






22. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.






23. (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;






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






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






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






27. 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






28. {current liabilities/[(total expenses






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






30. The rise in an economy's general level of prices.






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






32. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






33. 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.






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






35. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






36. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






37. What a series of equal payments in the future is worth today taking into account the time value of money.






38. 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






39. Each service center






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






41. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






42. An entity that owns other companies.






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






44. 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.






45. (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






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






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






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






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






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