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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. Capital investment decisions designed to increase an organization's strategic position.






2. 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






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






4. 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






5. [Surplus/Operating Revenues]






6. 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.






7. 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.






8. An organization whose profits can be distributed outside the organization and must pay taxes. Also called investor-owned organizations.






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






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






11. The method of capital budgeting that compares the cash flows resulting from continuing with the existing alternative to those that would result if the equipment were replaced.






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






13. 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.






14. Stated interest rate on a bond - as promised by the issuer.






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






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






17. An assignment or grading of the likelihood that an organization will not default on a bond.






18. 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.






19. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






21. The bottom area of the financial statements that contains key information not available in the body of the statements - such as how charity is determined - the composition of investments - which assets are restricted - and the depreciation method.






22. Costs that stay the same in total over the relevant range as volume increases - but that change inversely on a per unit basis.






23. 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.






24. A certificate attached to a bond representing the amount of interest to be paid to the holder.






25. Gross proceeds less the underwriter's fee and other issuance fees.






26. Time delays in the billing and collection process. There are four categories of float: billing - collection - transit - and disbursement. An organization's goal is to optimize float for incoming revenues and outgoing bills.






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






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






29. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.






30. (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






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






32. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.






33. The difference between current assets and current liabilities.






34. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






35. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.






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






37. The delay between providing the service and getting the bill to the patient or third party. There are two aspects of billing float: assembling the bill and delivering the bill to the patient or third-party payor.






38. 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).






39. An approach to analyzing the financial condition of an organization based on ratios calculated from line items found in the financial statements. There are four major categories of ratios: liquidity - profitability - capitalization - and activity.






40. The ability of an organization to find new ways to operate that obviate the need for certain classes of costs - such as doing procedures on an outpatient rather than inpatient basis.






41. Responsibility centers responsible for making a certain return on investments.






42. An entity that owns other companies.






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






44. 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






45. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.






46. 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.






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






48. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.






49. {current liabilities/[(total expenses






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