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






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






3. Each service center






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






5. [Surplus/Operating Revenues]






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






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






8. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






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






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






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






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






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






14. A technique to evaluate an organization's strengths - weaknesses - opportunities - and threats. Also called a WOTS-up analysis.






15. A budget which presents not only line items and programs but also the performance goals that each program can be expected to attain. See also Line item budget and Program budget.






16. 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.






17. [(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






18. 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.






19. (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






20. The elapsed time between financial statements. Common accounting periods






21. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






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






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






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






25. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






26. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






27. A series of equal cash flows made or received at regular time intervals. Ordinary annuities occur at the end of each period whereas annuities due occur at the beginning of each period.






28. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






29. The cash flows derived from an organization's operating activities.






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






31. 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.






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






33. (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;






34. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






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






36. (excess of revenues over expenses/total assets)- A measure of how much profit is earned for each dollar invested in assets. In for-profit organizations it is called return on assets and is calculated as: net income/assets.






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






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






39. 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.






40. 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.






41. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






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






43. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






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






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






47. 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.






48. Properties and equipment less accumulated depreciation.






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






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