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ACCA Financial Management
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Study First
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. Debt to be paid off in a period longer than one year.
Responsibility center
Assets
Long-term financing
Strategic decisions
2. Assets that have a physical presence.
Tangible assets
Donation
Traditional profit centers
Expenses
3. 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
Assets
Permanently restricted net assets
HMO
Horizontal analysis
4. (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.
Return on total assets
Efficiency
Controlling activities
Deferred revenues
5. How an organization chooses to finance its working capital needs.
Financing mix
Prepaid assets
Tax-exempt bonds
Net present value
6. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Billing float
Top-down budgeting
Performance budget
7. One of the four major financial statements. It answers the question: Where did our cash come from and where did it go during the accounting period?
Long-term investments
Statement of cash flows
Service centers
Deferred revenues
8. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Revenues
Strategic planning
Strategic decisions
Capital structure ratios
9. Financing that will be paid back in less than one year.
Strategic decisions
Interest
Short-term financing
ABC
10. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.
Notes payable
Multiyear budget
Operating cash flows
Investment grade
11. 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
Capital appreciation
Net increase (decrease) in cash and cash equivalents
Amortization of a loan
Other expenses
12. Supplementing traditional sources of revenue with new sources.
Float
Activity ratios
Revenue enhancement
Leverage
13. Operating income not reported elsewhere under revenues - gains - and other support.
Other revenues
Operating cash flows
Liquidity ratios
Donation
14. The budget used to forecast operating expenses.
Expense budget
Current liabilities
Fixed Asset Turnover
Annuity
15. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Expense budget
Deferred revenues
Strategic planning
Cost centers
16. 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.
Ratio analysis
Other revenues
IRR
Mutually exclusive projects
17. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.
Service centers
Comparative approach
Debt service coverage
Allocation base
18. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Increase in unrestricted net assets
Volume diversity
Certainty
Tangible assets
19. Financial obligations that will be paid off over a time period longer than one year
Capital assets
Non-current liabilities
Discounting
Liquidity ratios
20. Expenses of the organization incurred in non-health-care related activities.
Fixed labor budget
Non-operating expenses
Strategic planning
Budget
21. The idea that a dollar today is worth more than a dollar in the future.
Time value of money
Capital budget
Revenues
Operating expenses
22. Ratios designed to answer the question: How profitable is the organization?
Profitability ratios
IRR
Operating income
For-profit
23. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Co-payments
Current assets
Net accounts receivable
Long-term financing
24. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Net proceeds from a bond issuance
Footnotes
Top-down/bottom-up approach
Temporarily restricted net assets
25. Being subject to sanctions with respect to carrying out responsibilities.
Net working capital
Average payment period
Accountability
Capital budget
26. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Revenue rate variance
Amortization of a loan
Perpetuity
Cash basis of accounting
27. The system of accounting that recognizes revenues when earned and expenses when resources are used. This method is used by most non-governmental health care organizations. See also Cash basis of accounting.
Accrual basis of accounting
Step-down method
Program budget
Discounting
28. A note payable that has as collateral real assets and that requires periodic payments.
Efficiency
Allocation
Other support
Mortgage
29. 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.
IRR
Increase in unrestricted net assets
Administrative profit centers
Effectiveness
30. One of the four major financial statements. It summarizes the organization's revenues and expenses during an accounting period as well as other items that affect its unrestricted net assets. It is analogous to - but different from - an income stateme
Statement of operations
Line-item budget
Periodic payments
Liquidity ratios
31. The activities of an organization directly related to its main line of business.
Operating activities
Mail float
Revenue enhancement
Long-term debt - net of current portion
32. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Capital structure decision
Total asset turnover
Net patient service revenue
Financing activities
33. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.
Cash equivalents
Tangible assets
Mortgage bonds
Time value of money
34. A transaction that reduces the risk of an investment.
Dividends
Hedge
Profitability ratios
Retained earnings
35. The elapsed time between financial statements. Common accounting periods
Non-operating income
HMO
Fixed costs
Accounting period
36. 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.
Statement of operations
Not-for-profit
Centralization
Comparative approach
37. [total revenues/total assets].- This ratio measures the overall efficiency of the organization's assets to produce revenue. It answers the question: For every dollar in assets - how many dollars of revenue are being generated?
Cash flows from investing activities
Total asset turnover
Other support
Net proceeds from a bond issuance
38. 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.
Collections policies and procedures
Budget
Accounts payable
Cash equivalents
39. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Mortgage
Dividends
Total asset turnover
HMO
40. Market value. The price at which something - such as bonds and stocks - could be bought or sold today on the open market.
G & A expenses
Accountability
MV
Fixed supplies budget
41. [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
Centralization
Long-term debt to net assets ratio
Long-term investments
Fixed Asset Turnover
42. Capital investment decisions designed to increase the operational capability of a health care organization.
Donor
Administrative cost centers
Expansion decisions
Top-down budgeting
43. Irregular cash flows - typically occurring at the end of the life of a project.
Fixed supplies budget
Financing activities
Non-regular cash flows
Cash basis of accounting
44. The difference between what was planned (budgeted) and what was achieved (actual).
Budget variance
Collection float
Income from investments
Compounding
45. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Fixed (interest) rate debt
Times interest earned
Asset Management ratios
Cash equivalents
46. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.
Administrative cost centers
Billing float
Single/Simple Step
Ending inventory
47. 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.
Statement of operations
Balance sheet
Long-term debt - net of current portion
Billing float
48. Budgets that typically cover two to five years.
Collections policies and procedures
Average Days Receivable
Net proceeds from a bond issuance
Multiyear budget
49. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Periodic payments
Liquidity ratios
Investor
Equity financing
50. The income (operating revenues -operating expenses) earned in non-health-care related activities.
Bond rating
Operating expenses
Non-operating revenues
Non-operating income