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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. [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?






2. The absence of risk in an investment.






3. The cost of the supplies on hand at the beginning of the year.






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






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






6. 1) The resources used to produce a good or service. 2) The amount of cash given up in a transaction. 3) Price. The first definition is based on accrual accounting and the second on cash accounting.






7. The cash flows derived from an organization's operating activities.






8. 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.






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






10. 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






11. [Net Accounts Receivable/(Revenue/356)]






12. 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.






13. [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).






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






15. [(excess of revenues over expenses + interest expense)/interest expense].- This ratio enables creditors and lenders to evaluate an organization's ability to generate earnings necessary to meet interest expense requirements. In for-profit organization






16. The percentage of each asset relative to total assets.






17. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization






18. The amount the holder of the coupon receives periodically - usually semiannually. Over the year - it equals the coupon rate times the face value of the bond.






19. A good or service provided in return for some type of compensation.






20. The income (operating revenues -operating expenses) earned in non-health-care related activities.






21. (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.






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






23. The category of assets summarizing the amount of the major capital investments of the facility in plant - property - and equipment (PP&E). Plant means buildings - property is land - and equipment includes a wide variety of durable items from beds to






24. 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.






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






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






27. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.






28. The purchase of assets with contributed and internally generated funds. See also Debt financing.






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






30. 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.






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






32. A category of income that includes unrestricted interest - dividends - and gains from the sale of unrestricted investments.






33. The resources owned by the organization. It is one of the three major categories on the balance sheet.






34. Revenue is recorded when goods or services are delivered






35. An entity that gives capital to another entity in expectation of a financial or non-financial return.






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






37. Service center costs are allocated to both mission centers and other service centers






38. One of the four major financial statements. It explains the changes in net assets from one period to the next on the balance sheet. Also called statement of changes in owners' equity in a for-profit business.






39. A contract in which the lessee (user) agrees to pay the leassor (owner) a specific amount over a period of time for the use of an asset.






40. 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?






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






42. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






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






44. How an organization chooses to finance its working capital needs.






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






46. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.






47. The organization's legal obligations to pay its creditors. Liabilities are classified as current and non-current. Liabilities are one of the three major categories on the balance sheet and are part of the fundamental accounting equation.






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






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






50. Operating income not reported elsewhere under revenues - gains - and other support.