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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 amount of supplies used to provide a service or good.






2. A form of long-term financing whereby the issuer receives cash and in return issues a note called a bond. By issuing the bond - the issuer agrees to make principal and/or interest payments on specific dates to the holders of the bond.






3. [Total Revenues/ Total Assets]






4. The method by which to distribute service center costs to mission centers; in general the one that most accurately measures use by the cost centers that receives its services (food service - # of meals - hospital laundry - # of pounds processed)






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






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






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






8. Generally - assets that will be used or consumed within one year. Some organizations use a period of less than one year.






9. Literally non-movable assets. Generally used to refer to buildings and equipment.






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






11. 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.






12. A method to evaluate the feasibility of an investment by determining how long it would take until the initial investment is recovered. This method does not account for the time value of money.






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






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






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






16. (excess of revenues over expenses/net assets)- In not-for-profit health care organizations - it measures the rate of return for each dollar in net assets. In for-profit organizations - it measures the rate of return for each dollar in owners' equity;






17. What a series of equal payments in the future is worth today taking into account the time value of money.






18. 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.






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






20. Series of payments over time - such as interest paid to bondholders.






21. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced






22. 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






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






24. The degree of dispersion of responsibility within an organization. See also Centralization.






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






26. 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.






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






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






29. The central document of the planning/control cycle. It identifies revenues and resources that will be needed by an organization to achieve its goals and objectives.






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






31. 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.






32. Organizational units responsible for providing services and controlling their costs. There are two major types: clinical cost centers and administrative cost centers.






33. Amounts earned by the organization from the provision of service or sale of goods.






34. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.






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






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






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






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






39. Ratios designed to answer the question: How profitable is the organization?






40. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.






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






42. 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.






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






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






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






46. 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.






47. 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.






48. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.






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






50. 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.