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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. Revenue is recorded when goods or services are delivered






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






3. 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






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






5. 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.






6. 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.






7. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.






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






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






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






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






12. The ease and speed with which an asset can be turned into cash.






13. 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






14. [Total Revenues/(Net Fixed Assets)]. This ratio measures the number of dollars generated for each dollar invested in an organization's fixed assets (i.e. plant and equipment).






15. 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.






16. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.






17. A situation in which if one project is implemented the other(s) will not be.






18. Assets that have a physical presence.






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






20. 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.






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






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






23. [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.






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






25. The degree of dispersion of responsibility within an organization. See also Centralization.






26. Being subject to sanctions with respect to carrying out responsibilities.






27. Supplementing traditional sources of revenue with new sources.






28. Directly related to the purposes of the organization and the delivery of services






29. Assets that provide service for a period exceeding one year. Sometimes referred to as long-term assets.






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






31. 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.






32. 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.






33. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






34. A balance sheet account that estimates the total amount of customer accounts receivable that will not be collected. It is also called allowance for bad debts and allowance for doubtful accounts.






35. Financial and non-financial standards against which organizational performance is measured.






36. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.






37. Revenues generated from an organization's operating activities.






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






39. The total amount of multiyear debt due in future years.






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






41. {current liabilities/[(total expenses






42. Cash inflows and outflows for the organization resulting from investing activities such as purchasing and selling investments or investing in itself by purchasing or selling non-current assets. It also includes transfers to and from the parent corpor






43. Assets = Liabilities + Net Assets (aka Equity).






44. The increase in the value of an investment from the time it is purchased until the time it is sold.






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






46. The rate of return required to undertake a project. Also called the hurdle rate or discount rate.






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






48. The section of the expense budget that forecasts salary and benefits.






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






50. The process of distributing service center costs to mission centers - to determine the full cost of each mission center