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






2. Service center costs are allocated to both mission centers and other service centers






3. 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.






4. Each service center






5. An entity that owns other companies.






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






7. 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.






8. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.






9. [(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






10. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






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






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






13. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.






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






15. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.






16. A section of the statement of cash flows used to report such activities as borrowing and paying back loans.






17. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






18. (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






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






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






22. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






23. 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.






24. 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).






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






26. 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.






27. Private entity or individual who makes a donation






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






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






30. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






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






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






33. Being subject to sanctions with respect to carrying out responsibilities.






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






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






36. Budgets that typically cover two to five years.






37. 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.






38. 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






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






40. 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.






41. Financial obligations that will be paid off over a time period longer than one year






42. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






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






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






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






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






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






49. 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






50. The resources owned by the organization. It is one of the three major categories on the balance sheet.