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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 method of allocating costs that are not directly paid for (utilities - rent - administration) into those products or services to which payment is attached (day of care - a brief visit). See also Activity-based costing.






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






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






4. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.






5. [Total Liabilities/ Net assets]






6. Financing used expressly for the purchase of non-current assets.






7. 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.






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






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






10. The section of the statement of cash flows that reports the total change in cash and cash equivalents over the accounting period.






11. The total amount of multiyear debt due in future years.






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






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






14. A benefit paid for in advance (rent - insurance - etc.). Also called prepaid expense.






15. [(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






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






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






18. Stated interest rate on a bond - as promised by the issuer.






19. 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.






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






21. Revenues generated from an organization's operating activities.






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






24. 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.






25. 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.






26. The balance sheet category that includes actual money on hand as well as money equivalents - such as savings and checking accounts. It excludes cash restricted as to its use for something other than current operations.






27. [Net Accounts Receivable/(Revenue/356)]






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






29. The section of the expense budget that forecasts salary and benefits.






30. A measure of the income earned from operating activities. It is calculated as: unrestricted revenues - gains - and other support -expenses and losses.






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






32. 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.






33. A situation in which if one project is implemented the other(s) will not be.






34. 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.






35. A contract between a lender and a potential borrower preauthorizing the potential borrower's right to borrow up to a specific amount on request as long as they fulfill the terms and conditions of the contract. Also called a letter of credit.






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






37. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.






38. Recording expenses associated with making revenue at the same time as revenues are recognized






39. 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






40. A certificate attached to a bond representing the amount of interest to be paid to the holder.






41. 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?






42. Properties and equipment less accumulated depreciation.






43. The current traded rate for similar risk securities.






44. Budgets that typically cover two to five years.






45. 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.






46. A statistic used to allocate costs from a cost center based on a cause and effect relationship. For example - a common allocation base to allocate the costs of maintaining medical records is number of visits. See also Cost driver.






47. Financial and non-financial standards against which organizational performance is measured.






48. The increase in the value of an investment from the time it is purchased until the time it is sold.






49. [Total Revenues/ Total Assets]






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