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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. A borrower's assets on which a lender has legal claim if a borrower defaults on a loan.
Cost avoidance
Collateral
Service centers
FV
2. The activities of an organization directly related to its main line of business.
Billing float
Profit margin
Line-item budget
Operating activities
3. Assets that have restrictions on their use which will be removed either with the passage of time or the occurrence of some event.
Fixed assets
Opening inventory
Temporarily restricted net assets
Working capital
4. Opposite of the authoritarian approach. The roles and responsibilities of the budgeting process are diffused throughout the organization. Often called the participatory approach.
FTE
Top-down/bottom-up approach
Quick ratio
Times interest earned
5. Stated interest rate on a bond - as promised by the issuer.
Other income
Collateral
Coupon rate
Cash and cash equivalents
6. Each service center
Single/Simple Step
Breakeven point
Operating revenues
Mutually exclusive projects
7. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Book value
Permanently restricted net assets
Total revenue
G & A expenses
8. [(cash + marketable securities + net accounts receivable)/current liabilities)- A measure of the organization's liquidity.
Contribution margin
Quick ratio
Coupon
Line-item budget
9. Assets minus Liabilities. One of the three major categories on the balance sheet. Traditionally known as stockholders' equity in investor-owned organizations and fund balance in not-for-profit organizations. In not-for-profit health care organization
Cash flows from operating activities
Temporarily restricted net assets
Footnotes
Net Assets
10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.
Net present value
Debt service coverage
Net increase (decrease) in cash and cash equivalents
Cost avoidance
11. Amounts earned by the organization from the provision of service or sale of goods.
Revenues
Capital
Contribution margin
Non-operating ratio
12. 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
Depreciation
Accounting period
Other income
Return on net assets
13. {[cash + marketable securities)/[(operating expenses -depreciation)/ 365].- A ratio that indicates the number of days' worth of expenses an organization can cover with its most liquid assets (cash and marketable securities).
Fixed (interest) rate debt
Days cash on hand
Coupon
Operating revenues
14. Capital investment decisions designed to increase the operational capability of a health care organization.
Cost of goods sold
Interest
Expansion decisions
Return on total assets
15. The process of distributing service center costs to mission centers - to determine the full cost of each mission center
Allocation
Quick ratio
Spillover cash flows
Creditor
16. The revenue and expense budgets of an organization.
Operating budget
Investor
Operating cash flows
Line of credit
17. The expenses incurred from an organization's operating activities.
Lien
Collection float
Operating expenses
Beginning inventory
18. Expenses of the organization incurred in non-health-care related activities.
Certainty
Non-operating expenses
Fixed assets
Strategic financial planning
19. 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.
Capital assets
Ending inventory
Increase in unrestricted net assets
Statement of changes in net assets
20. Decisions regarding the relative amount of debt and equity used to finance the organization's non-current assets.
Capital structure decision
Current ratio
Capital appreciation
ROI
21. Requiring the patient to pay part of his/her health care bill. These payments are used to prevent over-utilization of services.
Line-item budget
Co-payments
Transaction
Non-operating revenues
22. The cost of a capital asset (i.e. building or equipment) minus accumulated depreciation.
Statement of changes in net assets
Net assets released from restriction
Book value
Temporarily restricted net assets
23. 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
Profit margin
Amortization of a loan
Bonds
Assets
24. A measure of the resources used to generate revenue and/or provide a service. Often used synonymously with costs. See also Costs.
Expenses
Discount rate
Net accounts receivable
Fixed assets
25. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Mutually exclusive projects
Certainty
Financing activities
Net patient service revenue
26. 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.
Operating expenses
Working capital
Compounding
Activity Based Costing
27. Amounts given to the organization for operating purposes - such as governmental appropriations and unrestricted donations.
IRR
Coupon
Other support
Long-term debt to net assets ratio
28. A transaction that reduces the risk of an investment.
Loan amortization schedule
Hedge
Mortgage
Administrative cost centers
29. Directly related to the purposes of the organization and the delivery of services
Net patient service revenue
Mission Center
Breakeven point
Deferred revenues
30. An organization's financial obligations that are to be paid within one year.
Current liabilities
Certainty
Precautionary purposes
Service centers
31. 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.
Net accounts receivable
Operating activities
Comparative approach
Inflation
32. Being subject to sanctions with respect to carrying out responsibilities.
Lender
Disbursement float
Accountability
Long-term investments
33. Supplementing traditional sources of revenue with new sources.
Non-regular cash flows
Revenue enhancement
Creditor
Excess of revenues over expenses
34. 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
Cash flows from investing activities
Operating cash flows
Volume diversity
Coupon rate
35. Ratios designed to answer the question: How profitable is the organization?
Loan amortization schedule
Profitability ratios
Discounted cash flows
Service centers
36. A catchall category for miscellaneous expenses and losses not included in other categories (telephone - travel - meals - etc.).
ROI
Multiyear budget
Other expenses
Average Days Inventory
37. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.
Properties and equipment
Efficiency
Mission statement
Co-payments
38. 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.
Return on net assets
Cash flows from investing activities
Cost of capital
IRR
39. Gross proceeds less the underwriter's fee and other issuance fees.
Net proceeds from a bond issuance
Controlling activities
Matching principle
Fixed assets
40. [(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.
Strategic financial planning
Budget
Expense budget
Expense cost variance
41. 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.
Administrative profit centers
Working capital
Top-down/bottom-up approach
Activity Based Costing
42. 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.
Centralization
Float
Cash flows from investing activities
Ending inventory
43. Cash flows that occur solely as a result of undertaking a project. Basically the marginal difference between alternatives.
Liquidity
Incremental cash flows
Days cash on hand
Investor
44. The cost of activities that take place to produce the final cost object
Bonds
Intermediate Cost Object
Profit margin
Statement of changes in net assets
45. [Inventory/ (Cost of Goods Sold/365)]
Line of credit
Spillover cash flows
Average Days Inventory
Capital financing
46. 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.
Other support
Investment grade
Top-down budgeting
Horizontal analysis
47. When products are manufactured in batches in different sizes - and overhead activities are affected by the size of the batch being produced
Asset mix
Perpetuity
Volume diversity
Asset Turnover Ratio
48. 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.
Cost of capital
Non-operating ratio
Billing float
Increase in unrestricted net assets
49. Cash flows that have been adjusted to their present value to account for the cost of capital (over time) and the time value of money.
Discounted cash flows
Common costs
G & A expenses
Expense cost variance
50. [(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
Expense budget
Accrued expenses
Amortization of a loan
Times interest earned