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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. A security interest in one or more assets granted to lenders in a secured loan.






2. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.






3. 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.






4. The budget format that lists revenues and expenses by category - such as labor - travel - and supplies. Categories are sometimes broken down into sub-categories. See also Performance budget and Program budget.






5. [Total Revenues/ Total Assets]






6. Capital investment decisions designed to increase the operational capability of a health care organization.






7. The ease and speed with which an asset can be turned into cash.






8. Price times total quantity.






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






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






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






12. The time between the issuance of the bill and the time funds are available for use by the health care organization. It has two components: mail float and processing float.






13. A security whose interest rate does not change during the lifetime of the bond.






14. 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.






15. Revenues of the organization earned in non-healthcare related activities.






16. 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.






17. 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.






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






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






20. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.






21. A legal obligation to pay the holder of the note or lien.






22. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.






23. [(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






24. [(excess of revenues over expenses + interest expense + depreciation expense)/(interest expense + principal payments))- A ratio that measures an organization's ability to pay back a loan. In for-profit organizations - it is calculated as: (net income






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






26. An entity that sells bonds in order to raise money.






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






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






29. Bonds that have received a rating ranging from AM to BBB (at S&P) - or Aaa to Bbb (Moody's) - of which the highest are called quality ratings.






30. Service center costs are allocated to both mission centers and other service centers






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






32. Demonstrates the extent to which the organization is earning money from its assets. Not usually as imp for NPs - varies w/ NP.






33. 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.






34. Private entity or individual who makes a donation






35. 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)






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






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






38. The activities of an organization directly related to its main line of business.






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






40. Assets that have a physical presence.






41. Irregular cash flows - typically occurring at the end of the life of a project.






42. [long-term debt/net assets]- A measure of the proportion of an organization's assets that are financed by debt as opposed to equity. In for-profit organizations - it is called the long-term debt to equity ratio and is calculated using the formula [lo






43. A budget in which line items are presented by program.






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






45. Directly related to the purposes of the organization and the delivery of services






46. Ratios that answer the question: How well is the organization positioned to meet its short-term obligations?






47. [(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






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






49. Costs (such as rent - administration - insurance - etc. that are shared by a number of services or departments and cannot easily be broken down to the services attributable to each (surgery - emergency medicine - etc.). Also called joint costs.






50. 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.