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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. The percentage of each asset relative to total assets.






2. 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?






3. 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.






4. The budget used to forecast - and in some cases justify - the expenditures (and in some cases the sources of financing) for non-current assets.






5. An entity that is owed money for lending funds or supplying goods or services on credit.






6. Organizational units responsible for providing administrative support at a profit to other organizational units or to the organization as a whole and/or raising funds externally.






7. 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






8. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






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






10. Revenue is recorded when goods or services are delivered






11. Costs that are traced to a cost object. See also Indirect costs and Cost object.






12. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach






13. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.






14. [(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






15. 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.






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






17. I) Calculating interest using the compound interest method. 2) Adjusting for the time value of money forward in time to a future value. See also Compound interest method and Discounting.






18. 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






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






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






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






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






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






24. A transaction that reduces the risk of an investment.






25. The rise in an economy's general level of prices.






26. 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.






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






28. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.






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






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






31. [(actual cost per unit -budgeted cost per unit) x actual volume).- The difference between the variable expenses that would have been expected at the actual volume and those actually incurred.






32. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.






33. The difference between what was planned (budgeted) and what was achieved (actual).






34. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.






35. 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.






36. Each service center






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






38. 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.






39. 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.






40. Previously restricted assets no longer restricted because the terms of the restriction have been met.






41. 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






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






43. Future value. What an amount invested today (or a series of payments made over time) will be worth at a given time in the future using the compound interest method. This accounts for the time value of money. See also Present value.






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






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






46. 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.






47. Funds provided by a private entity or individual without the requirement of repayment. Donations can either be restricted or unrestricted.






48. 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






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






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