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Test your basic knowledge |
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
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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. 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
Deferred revenues
Statement of operations
Other revenues
Liquidity
2. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.
Cash flows from financing activities
Cost Accounting
Activity Based Costing
Interest
3. The amount of supplies used to provide a service or good.
Statement of changes in net assets
Hedge
Cost of goods sold
Properties and equipment
4. Organizational units primarily responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization. Service centers are the most basic type of responsibility centers.
Statement of operations
Service centers
FTE
Permanently restricted net assets
5. Capital investment decisions designed to increase the operational capability of a health care organization.
Cash budget
Budget
Fixed labor budget
Expansion decisions
6. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Accountability
Collateral
Top-down/bottom-up approach
Asset mix
7. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?
Realization principle
Line-item budget
Liquidity ratios
Traditional profit centers
8. An investment that generates an annuity for an indefinite period of time - basically forever.
Performance measure
Capital budget
Perpetuity
Non-current assets
9. The difference between current assets and current liabilities.
Efficiency
Coupon
Indirect costs
Net working capital
10. [Total Revenues/ Total Assets]
Intermediate Cost Object
Asset Turnover Ratio
Operating income
Traditional profit centers
11. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Income from investments
Mutually exclusive projects
Allocation
Current ratio
12. Being subject to sanctions with respect to carrying out responsibilities.
Accountability
Bond rating agency
Book value
Hedge
13. The resources owned by the organization. It is one of the three major categories on the balance sheet.
Assets
Billing - collections - and disbursement policies and procedures
Co-payments
Bond rating agency
14. The increase in the value of an investment from the time it is purchased until the time it is sold.
Payback
Tax-exempt bonds
Loan amortization schedule
Capital appreciation
15. 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.
Precautionary purposes
Billing - collections - and disbursement policies and procedures
Liabilities
Top-down budgeting
16. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.
Capital structure decision
Cash and cash equivalents
Investment centers
Billing - collections - and disbursement policies and procedures
17. (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.
Return on total assets
ROI
Temporarily restricted net assets
Donation
18. Donated assets that have restrictions on their use which will never be removed.
Performance measure
Mortgage bonds
Permanently restricted net assets
Revenues
19. The gradual process of paying off debt through a long series of equal periodic payments. Each payment covers a portion of the principal plus current interest. The periodic payments are equal over the lifetime of the loan - but the proportion going to
Non-current liabilities
Deferred revenues
Responsibility center
Amortization of a loan
20. Current assets. Net working capital equals current assets –current liabilities.
Long-term debt - net of current portion
Working capital
Budget variance
Time value of money
21. Literally non-movable assets. Generally used to refer to buildings and equipment.
Operating margin
Fixed assets
Capital
Revenue budget
22. The degree to which standards are met.
Long-term investments
Line-item budget
Administrative profit centers
Effectiveness
23. 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.
Debt service coverage
Base Budget
Long-term investments
Expense budget
24. Organizational units responsible for providing health care related services to clients - patients - or enrollees - and the related costs thereof.
Investment centers
Clinical cost centers
Accrual basis of accounting
Service centers
25. process of measuring the resources (costs) used to produce results.
Accounts receivable
Cost Accounting
Investment centers
Expense budget
26. Financing used expressly for the purchase of non-current assets.
Financing activities
Accounting period
Capital financing
Statement of operations
27. The percentage of each asset relative to total assets.
Efficiency
Expense volume variance
Strategic decisions
Asset mix
28. The ease and speed with which an asset can be turned into cash.
Average payment period
Liquidity
Collateral
Basis of Allocation
29. The budget used to forecast operating expenses.
Average Days Receivable
Administrative cost centers
Expense budget
Capital appreciation
30. Amounts due to the organization from patients - third parties - and others.
Average Days Receivable
Asset Management ratios
Accounts receivable
Net accounts receivable
31. Price times total quantity.
Collateral
Operating margin
Total revenue
Billing - collections - and disbursement policies and procedures
32. 1) The degree to which power and authority is concentrated in an organization. 2) The degree to which a variety of services are offered at a single location.
Centralization
Step Down
FV
Asset mix
33. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Capital structure decision
Activity ratios
Properties and equipment - net
Equity financing
34. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Statement of operations
Operating cash flows
Indirect costs
Cash budget
35. 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.
Expenses
Decentralization
Coupon payment
Other revenues
36. Assets = Liabilities + Net Assets (aka Equity).
Deferred revenues
Basic accounting equation
Cash and cash equivalents
Net assets to total assets
37. [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.
Fixed assets
Current ratio
Lease
Other income
38. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Assets
Strategic planning
Expense budget
Cash basis of accounting
39. The current traded rate for similar risk securities.
Market rate of interest
Comparative approach
Breakeven point
Capital
40. 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.
Line of credit
Contribution margin
Fixed labor budget
Net working capital
41. Directly related to the purposes of the organization and the delivery of services
Coupon rate
Accountability
Mission Center
Capital financing
42. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.
Asset Management ratios
FV
Basis of Allocation
Beginning inventory
43. Expenses of the organization incurred in non-health-care related activities.
Financing activities
Non-operating expenses
Return on total assets
Activity Based Costing
44. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Quick ratio
Spillover cash flows
Disbursement float
Non-operating ratio
45. The rise in an economy's general level of prices.
Intermediate Cost Object
Collateral
Accounts receivable
Inflation
46. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.
Periodic payments
Basic accounting equation
Operating income
G & A expenses
47. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.
Program budget
Lender
Fixed costs
Long-term investments
48. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Capital
Net Assets to Total Assets
G & A expenses
Quick ratio
49. 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
Mission Center
Long-term debt - net of current portion
Financing mix
Cash flows from investing activities
50. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.
Cost centers
Operating budget
Common costs
Revenue rate variance