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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
.
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 section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Prepaid assets
Net Assets to Total Assets
Cost centers
Net increase (decrease) in cash and cash equivalents
2. 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.
Revenues
Loan amortization schedule
Billing float
Cost of capital
3. Recording expenses associated with making revenue at the same time as revenues are recognized
Non-current liabilities
Matching principle
Average payment period
Net assets released from restriction
4. 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.
Bad debt
Billing - collections - and disbursement policies and procedures
Volume diversity
Long-term investments
5. The revenue and expense budgets of an organization.
Cost Accounting
Loan amortization schedule
Bond rating
Operating budget
6. process of measuring the resources (costs) used to produce results.
Cost Accounting
Step Down
Time value of money
Other expenses
7. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.
Liquidity ratios
Long-term debt to net assets ratio
Current assets
Statement of changes in net assets
8. 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
SWOT analysis
Bonds
Amortization of a loan
Expense cost variance
9. The cost of activities that take place to produce the final cost object
Intermediate Cost Object
SWOT analysis
Net Assets
Realization principle
10. Full-time equivalent employees. Two half-time employees equal one FTE.
FTE
Performance budget
Bad debt
HMO
11. [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.
Basic accounting equation
Operating income
Fixed assets
Current ratio
12. Ratios that measure how the organization's assets are financed and/or whether the organization can take on new debt.
Capital structure ratios
Operating revenues
Net patient service revenue
Capital investment decisions
13. Decisions regarding the acquisition of capital assets. The capital investment decision should be separate from the decision on how to finance capital assets.
Capital investment decisions
Bonds
Long-term investments
Capital
14. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Ratio analysis
Mutually exclusive projects
Net working capital
Collateral
15. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.
Service centers
Prepaid assets
Cash equivalents
Increase in unrestricted net assets
16. 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.
Loan amortization schedule
Mission statement
Net accounts receivable
SWOT analysis
17. Literally non-movable assets. Generally used to refer to buildings and equipment.
Fixed assets
Net Assets to Total Assets
Net present value
Dividends
18. An entity that gives capital to another entity in expectation of a financial or non-financial return.
Restricted donation
Fixed asset turnover
Investor
Non-current assets
19. When different products use overhead related services in different proportions - and when the costs of those services are significantly different - The situation present when products consume overhead in different proportions.
Mission statement
G & A expenses
Product diversity
Tangible assets
20. Budgets that typically cover two to five years.
Cost
Fixed costs
Multiyear budget
Creditor
21. 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.
Long-term investments
Operating activities
Notes payable
Asset Turnover Ratio
22. {current liabilities/[(total expenses
Long-term debt to net assets ratio
Average payment period
Profit margin
Cost Accounting
23. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Book value
Revenue rate variance
Net proceeds from a bond issuance
Tax-exempt bonds
24. 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
Cost Accounting
Not-for-profit
Mail float
Revenues
25. [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?
Transaction
Single/Simple Step
Total asset turnover
Statement of changes in net assets
26. 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?
Statement of cash flows
Deferred revenues
Certainty
Liquidity ratios
27. A transaction that reduces the risk of an investment.
Hedge
Step-down method
Investor
Not-for-profit
28. [(actual volume -budgeted volume) x budgeted cost per unit).- The portion of total variance that is due to actual volume being either higher or lower than budgeted volume. It is the difference between the expenses forecast in the original budget and
Administrative cost centers
Top-down budgeting
Expense volume variance
Cost
29. The degree of dispersion of responsibility within an organization. See also Centralization.
Decentralization
Common costs
Accrual basis of accounting
Traditional profit centers
30. Setting aside cash to meet unexpected demands - such as unexpected maintenance of a facility or piece of equipment.
Debt to equity
Precautionary purposes
Net Assets to Total Assets
Line-item budget
31. Capital investment decisions designed to increase the operational capability of a health care organization.
Long-term investments
Ratio analysis
Expansion decisions
Activity Based Costing
32. Costs not traced to a cost object - but that must eventually be allocated across cost objects. See also Direct costs.
Indirect costs
Non-current assets
Net Assets to Total Assets
Lien
33. 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
HMO
Investment centers
Properties and equipment
Fixed Asset Turnover
34. Operating income not reported elsewhere under revenues - gains - and other support.
Disbursement float
Other revenues
Current ratio
For-profit
35. 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.
Cost avoidance
Capital investment decisions
Excess of revenues over expenses
Activity ratios
36. 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.
Billing - collections - and disbursement policies and procedures
Fully allocated costs
Bond rating
Net assets released from restriction
37. Current assets. Net working capital equals current assets –current liabilities.
Hedge
Permanently restricted net assets
Working capital
Step-down method
38. Capital investment decisions designed to increase an organization's strategic position.
Operating activities
Investment centers
Strategic decisions
Co-payments
39. Internal rate of return. The percentage return on an investment. It is the rate of return at which the net present value equals zero. Often used as a comparison to cost of capital.
Certainty
Volume diversity
IRR
Cost Accounting
40. Organizational units responsible for their own costs that provide administrative support to other organizational units or the organization
Incremental cash flows
Administrative cost centers
Balance sheet
Allowance for uncollectibles
41. 1) The returns that must be generated on a project to compensate the organization for its risk. 2) The returns the organization is foregoing by investing its money in one project as opposed to an alternative of similar risk. See also Cost of capital.
Investment centers
Asset mix
Increase in unrestricted net assets
Discount rate
42. Financial obligations that will be paid off over a time period longer than one year
Non-current liabilities
Cost centers
Other expenses
Step-down method
43. The ease and speed with which an asset can be turned into cash.
Leverage
Cost
Liquidity
Expense budget
44. Properties and equipment less accumulated depreciation.
Activity Based Costing
Properties and equipment - net
Perpetuity
Ratio analysis
45. 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
Single/Simple Step
Accounts payable
Common costs
ABC
46. If a project is undertaken - these cash flows are the indirect increases or decreases in cash flows that will occur elsewhere in the organization.
Accountability
Net accounts receivable
Spillover cash flows
Leverage
47. Revenues of the organization earned in non-healthcare related activities.
Float
Cost of capital
Non-operating revenues
Cash flows from operating activities
48. Responsibility centers responsible for making a certain return on investments.
Revenues
Inflation
Investment centers
Billing - collections - and disbursement policies and procedures
49. Financial and non-financial standards against which organizational performance is measured.
Effectiveness
Collection float
Discount rate
Performance measure
50. 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.
Compounding
Depreciation
Top-down budgeting
Collateral