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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. 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






2. An investment that generates an annuity for an indefinite period of time - basically forever.






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






4. Current assets. Net working capital equals current assets current liabilities.






5. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.






6. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.






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






8. [current assets/current liabilities].- This liquidity ratio measures the proportion of all current assets to all current liabilities to determine how easily current debt can be paid off. It is one of the most commonly used ratios.






9. The absence of risk in an investment.






10. 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.






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






12. process of measuring the resources (costs) used to produce results.






13. [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






14. The amount of supplies used to provide a service or good.






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






16. [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?






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






18. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






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






20. 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.






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






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






23. Debt to be paid off in a period longer than one year.






24. Revenues of the organization earned in non-healthcare related activities.






25. A security interest in one or more assets granted to lenders in a secured loan.






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






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






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






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






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






31. The expenses incurred from an organization's operating activities.






32. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






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.






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






35. The section of the expense budget that forecasts the cost of those supplies that will not vary as a direct result of changes in the amount of services provided (such as administrative office supplies).






36. An entity that owns other companies.






37. 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






38. 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.






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






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






41. Series of payments over time - such as interest paid to bondholders.






42. Demonstrates the ability to pay off long term debt






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






44. Financing used expressly for the purchase of non-current assets.






45. The planning process that identifies the organization's mission and strategy in order to position itself for the future.






46. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






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






48. The current traded rate for similar risk securities.






49. 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.






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