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ACCA Financial Management
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Subjects
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certifications
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business-skills
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acca
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. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Revenues
Asset mix
Service centers
2. [Surplus/Operating Revenues]
Accountability
Discount rate
Accounting period
Profit margin
3. [Total Liabilities/ Net assets]
Precautionary purposes
Debt to equity
Deferred revenues
Traditional profit centers
4. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.
Current assets
Discount rate
Incremental cash flows
Non-operating revenues
5. 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
Not-for-profit
Other expenses
Allocation
Debt service coverage
6. Literally non-movable assets. Generally used to refer to buildings and equipment.
Fixed (interest) rate debt
Net assets released from restriction
Top-down budgeting
Fixed assets
7. Assets = Liabilities + Net Assets (aka Equity).
Basic accounting equation
Cost avoidance
FV
SWOT analysis
8. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Incremental cash flows
Ratio analysis
Beginning inventory
Top-down/bottom-up approach
9. The activities of an organization directly related to its main line of business.
Depreciation
Allowance for uncollectibles
Operating activities
G & A expenses
10. process of measuring the resources (costs) used to produce results.
Long-term investments
Average Days Receivable
FV
Cost Accounting
11. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Service centers
Mission statement
Book value
Statement of cash flows
12. 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.
Certainty
Capital budget
Administrative profit centers
Lease
13. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Cash basis of accounting
Capital investment decisions
Lien
Coupon payment
14. A security whose interest rate does not change during the lifetime of the bond.
Long-term financing
Fixed (interest) rate debt
Base Budget
Coupon rate
15. Health maintenance organization. Entities that receive premium payments from enrollees with the understanding that the HMO will be financially responsible for all predefined health care required by its enrollees for a specified period of time. The he
Strategic financial planning
HMO
Liabilities
Fixed assets
16. 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)
Coupon
Asset Management ratios
Basis of Allocation
Long-term debt - net of current portion
17. Amounts the organization is obligated to pay others - including suppliers and creditors.
Net Assets to Total Assets
Collections policies and procedures
Accounts payable
Income from investments
18. A security interest in one or more assets granted to lenders in a secured loan.
Periodic payments
Lien
For-profit
Budget
19. 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.
Common costs
Average Days Receivable
Non-current assets
IRR
20. [Total assets/Net Assets]
Cash flows from operating activities
Leverage
Perpetuity
Basic accounting equation
21. Directly related to the purposes of the organization and the delivery of services
Controlling activities
Mission Center
Ratio analysis
Contribution margin
22. 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.
Net assets released from restriction
Retained earnings
Service centers
Mutually exclusive projects
23. [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
Long-term debt to net assets ratio
Total revenue
Asset Management ratios
Other expenses
24. The amount of inventory on hand at the beginning of an accounting period. See also Ending inventory.
Expense cost variance
Beginning inventory
Expansion decisions
Bond rating
25. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Creditor
Operating margin
Fully allocated costs
Net patient service revenue
26. The costs of a service after taking into account its direct and fair share of allocated costs.
Cost object
Fully allocated costs
Periodic payments
Net present value
27. 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.
Accountability
Capital assets
Fixed labor budget
Transaction
28. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Operating cash flows
Prepaid assets
Long-term financing
Net increase (decrease) in cash and cash equivalents
29. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Cost object
Co-payments
Expense cost variance
Top-down/bottom-up approach
30. Proceeds lost by foregoing other opportunities.
Non-operating revenues
Collection float
Opportunity cost
Net Assets
31. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Cash basis of accounting
Accumulated depreciation
Prepaid assets
HMO
32. The section of the expense budget that forecasts salary and benefits.
Temporarily restricted net assets
IRR
Liabilities
Fixed labor budget
33. How an organization chooses to finance its working capital needs.
Financing mix
Profit margin
Administrative cost centers
Cash flows from financing activities
34. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Cash flows from operating activities
Opening inventory
MV
Liquidity ratios
35. Assets that have a physical presence.
Tangible assets
Collections policies and procedures
Line of credit
Profitability ratios
36. A transaction that reduces the risk of an investment.
Expansion decisions
Hedge
Opportunity cost
Operating income
37. The budget used to forecast operating expenses.
Collections policies and procedures
Cash equivalents
Capital structure ratios
Expense budget
38. [Net Assets/Total Assets]. This ratio reflects the proportion of total assets financed by equity.
Net Assets to Total Assets
Precautionary purposes
FV
Realization principle
39. What a series of equal payments in the future is worth today taking into account the time value of money.
Properties and equipment - net
Cost of capital
Present value of an annuity
Breakeven point
40. 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
Allocation base
ABC
Liquidity
Current ratio
41. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Activity Based Costing
Profitability ratios
Precautionary purposes
Allowance for uncollectibles
42. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Breakeven point
Profitability ratios
Cash basis of accounting
Non-current assets
43. 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.
Net present value
Compounding
Cash budget
Non-operating expenses
44. Supplementing traditional sources of revenue with new sources.
Accounting period
Liabilities
Non-current assets
Revenue enhancement
45. Financing used expressly for the purchase of non-current assets.
ABC
Capital financing
Dividends
G & A expenses
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.
Program budget
Collection float
Cash basis of accounting
Efficiency
47. [Inventory/ (Cost of Goods Sold/365)]
Perpetuity
Comparative approach
Return on total assets
Average Days Inventory
48. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Net Assets
Net accounts receivable
Other support
Mail float
49. The amount of supplies used to provide a service or good.
Capital investment decisions
Non-current assets
Cost of goods sold
Ending inventory
50. The sources of funds to finance the non-current assets of the organization. Also the debt and equity of the organization.
Mission Center
Cash basis of accounting
Capital
FTE