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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. Financing that will be paid back in less than one year.






2. Looks at the percentage change in a line item's value from one year to the next using the formula: [(subsequent year -base year)/base year) x 100. See also Vertical analysis.






3. An entity that is owed money for lending funds or supplying goods or services on credit.






4. A security whose interest rate does not change during the lifetime of the bond.






5. The amount of time between when an organization receives a service and pays for it.






6. Amounts the organization is obligated to pay others - including suppliers and creditors.






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






8. (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






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






10. [total revenues/net plant & equipment]- This ratio measures the number of dollars generated for each dollar invested in an organization's plant and equipment.






11. [(cash + marketable securities)/current liabilities). A liquidity ratio that measures how much cash and marketable securities are available to payoff all current liabilities.






12. [Total Revenues/ Total Assets]






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






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






15. 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.






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






17. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.






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. The percentage of each asset relative to total assets.






20. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






21. An amount owed to the organization that will not be paid. Charity care is not considered a bad debt since nothing is owed to the organization for services provided.






22. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






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






25. Literally non-movable assets. Generally used to refer to buildings and equipment.






26. 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.






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






28. An assignment or grading of the likelihood that an organization will not default on a bond.






29. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






30. 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.






31. The budget used to forecast operating expenses.






32. 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






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






34. 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.






35. 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.






36. Organizational unit given the responsibility to carry out one or more tasks and/or achieve one or more outcomes.






37. Expenses of the organization incurred in non-health-care related activities.






38. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






39. [Surplus/Operating Revenues]






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






41. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.






42. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.






43. The amount remaining after subtracting variable costs from revenues. When the organization is not at capacity - it is the "profit" the organization makes on providing each new unit that is available to cover all other costs. Contribution margin may b






44. 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.






45. [Total assets/Net Assets]






46. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






47. Price times total quantity.






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






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






50. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.