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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. 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
Quick ratio
Days cash on hand
Administrative cost centers
2. Tools used to increase the amount of cash available to the organization. The objective of billing - credit - and collection policies is to accelerate cash receipts; the objective of cash disbursement policies is to slow down cash outflows.
Parent organization
Discounting
Billing - collections - and disbursement policies and procedures
Liquidity ratios
3. (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
Non-regular cash flows
Inflation
Net proceeds from a bond issuance
Tax-exempt bonds
4. The planning process that identifies the organization's mission and strategy in order to position itself for the future.
Coupon
Net increase (decrease) in cash and cash equivalents
Strategic planning
Depreciation
5. The cash flows derived from an organization's operating activities.
Beginning inventory
Asset mix
Operating cash flows
Base Budget
6. Directly related to the purposes of the organization and the delivery of services
Mission Center
Operating cash flows
Efficiency
Non-operating revenues
7. A legal obligation to pay the holder of the note or lien.
Collections policies and procedures
Activity ratios
Performance budget
Notes payable
8. The idea that a dollar today is worth more than a dollar in the future.
Time value of money
Leverage
Fixed costs
Spillover cash flows
9. 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.
Disbursement float
ROI
Performance budget
Restricted donation
10. [Total Revenues/ Total Assets]
Basis of Allocation
Perpetuity
Asset Turnover Ratio
Liabilities
11. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Operating income
Liabilities
Top-down/bottom-up approach
Short-term financing
12. [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?
Total asset turnover
Base Budget
Collateral
Prepaid assets
13. Responsibility centers responsible for making a certain return on investments.
Investment centers
Net proceeds from a bond issuance
Long-term investments
Parent organization
14. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
Controlling activities
Allocation
Intermediate Cost Object
Top-down/bottom-up approach
15. Price times total quantity.
Revenue budget
Other expenses
Total revenue
SWOT analysis
16. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Cash budget
Allocation
ROI
Final cost object
17. 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.
Discounting
ABC
Beginning inventory
Revenue rate variance
18. The costs of a service after taking into account its direct and fair share of allocated costs.
Creditor
Step Down
Fully allocated costs
Controlling activities
19. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net increase (decrease) in cash and cash equivalents
Average Days Receivable
Non-operating expenses
Accounts receivable
20. The revenue and expense budgets of an organization.
Statement of cash flows
Accumulated depreciation
Operating budget
Working capital
21. Properties and equipment less accumulated depreciation.
Properties and equipment - net
Total asset turnover
Disbursement float
Float
22. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Other expenses
Financing mix
Billing - collections - and disbursement policies and procedures
Prepaid assets
23. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.
Investment grade
Basic accounting equation
Net Assets
Line of credit
24. 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.
Equity financing
Cash basis of accounting
Capital financing
Capital assets
25. The cost of the supplies on hand at the beginning of the year.
Bonds
Opening inventory
Collections policies and procedures
Incremental cash flows
26. 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.
Float
Bond rating
Capital structure ratios
Long-term investments
27. A schedule detailing the principal and interest payments required to repay a loan. Typically - the periodic payments remain unchanged - but the proportion used to payoff the principal increases over time.
Administrative cost centers
Loan amortization schedule
Opening inventory
Operating margin
28. A donation that has conditions which must be satisfied. See also Temporarily restricted net assets.
Restricted donation
Capital assets
Cash flows from investing activities
Discount rate
29. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)
Mission Center
G & A expenses
Coupon rate
Final cost object
30. 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.
Traditional profit centers
IRR
Common costs
Responsibility center
31. Budgets that typically cover two to five years.
Multiyear budget
Discounting
Cost Accounting
Net assets released from restriction
32. A method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.
Efficiency
Cash flows from operating activities
Contribution margin
Step-down method
33. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Cash basis of accounting
Allocation base
Revenues
Fixed costs
34. 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.
Horizontal analysis
Mission Center
Capital financing
Float
35. Capital investment decisions designed to increase the operational capability of a health care organization.
Retained earnings
Expansion decisions
Net patient service revenue
Permanently restricted net assets
36. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Days cash on hand
Balance sheet
Permanently restricted net assets
Cost of capital
37. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Activity Based Costing
Long-term debt to net assets ratio
Liquidity ratios
Average payment period
38. Current year budget projected for the coming fiscal year assumes no program changes and adjust for price - workload - annualizations
Administrative profit centers
Base Budget
Leverage
Accounts receivable
39. [Surplus/Operating Revenues]
Not-for-profit
Lender
Profit margin
Strategic planning
40. The process of adjusting for the time value of money backward in time to present value. See also Compounding.
Issuer
G & A expenses
Discounting
Return on total assets
41. Donated assets that have restrictions on their use which will never be removed.
Permanently restricted net assets
Direct costs
Excess of revenues over expenses
Operating expenses
42. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Book value
Statement of changes in net assets
Bond rating agency
Expenses
43. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Incremental cash flows
Loan amortization schedule
Donor
44. I) The cost to borrow money. It can be expressed in dollars or as a percentage. 2) Payment to creditors for the use of money on credit.
Interest
Annuity
Parent organization
Basis of Allocation
45. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Intermediate Cost Object
Investment grade
Dividends
Tax-exempt bonds
46. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Basic accounting equation
Spillover cash flows
Controlling activities
Non-current assets
47. 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.
Cost
Present value of an annuity
Multiyear budget
Discount rate
48. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.
Footnotes
G & A expenses
Quick ratio
Mission statement
49. Organizational units primarily responsible for providing services and earning a profit based on the health care services provided.
Profit margin
Compounding
Performance budget
Traditional profit centers
50. 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.
Capital
Allocation base
Mortgage bonds
Non-operating income