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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. [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).






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






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






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






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






6. The current traded rate for similar risk securities.






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






8. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






9. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






10. [Total Revenues/ Total Assets]






11. 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






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






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






14. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






15. Revenue is recorded when goods or services are delivered






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






17. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.






18. The section of the expense budget that forecasts salary and benefits.






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






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






21. The budget used to forecast operating expenses.






22. Each service center






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






24. 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.






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






26. 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






27. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to






28. 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.






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






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






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






32. An organization's financial obligations that are to be paid within one year.






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






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






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






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






37. [(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






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






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






40. The cost of the supplies on hand at the beginning of the year.






41. 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.






42. 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.






43. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.






44. (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;






45. Demonstrates the ability to pay off long term debt






46. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






47. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






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






49. The total amount of multiyear debt due in future years.






50. 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.