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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. 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.






2. Private entity or individual who makes a donation






3. The degree to which standards are met.






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






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






6. I) Measuring inputs against outputs. 2) The cost of service per unit rendered.






7. Proceeds lost by foregoing other opportunities.






8. Responsibility centers responsible for making a certain return on investments.






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






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






11. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.






12. [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






13. 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.






14. Highly liquid current assets such as interest-bearing savings and checking accounts.






15. The amount of inventory on hand at the end of an accounting period. See also Beginning inventory.






16. Assets that have a physical presence.






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






18. 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.






19. [Total assets/Net Assets]






20. How an organization chooses to finance its working capital needs.






21. Monies received that have not yet been earned. One of the most common deferred revenues is the receipt of capitation on the basis of per member per month (PMPM).






22. Amounts the organization is obligated to pay others - including suppliers and creditors.






23. Portion of the profits the organization keeps in-house to use in support of its mission.






24. [net assets/total assets)- This ratio reflects the proportion of total assets financed by equity. In for-profit organizations it is called the equity to total asset ratio and is calculated using the formula [owners' equity/total assets).






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






26. 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.






27. The difference between current assets and current liabilities.






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






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






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






31. A statement intended to guide the organization into the future by identifying the unique attributes of the organization - why it exists - and what it hopes to achieve.






32. The budget used to forecast operating expenses.






33. 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.






34. Bonds that hold the health care provider's real property and equipment as security or collateral in case of default.






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






36. Properties and equipment less accumulated depreciation.






37. Traces indirect costs to activity that uses them. Overhead collected in pools and distributed to cost object by cost drivers.






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






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






40. The process of adjusting for the time value of money backward in time to present value. See also Compounding.






41. process of measuring the resources (costs) used to produce results.






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






43. That point at which total revenues equal total costs. It is described by the equation: (price x volume) = fixed costs + (variable cost per unit x volume).






44. [(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






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






46. 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.






47. Supplementing traditional sources of revenue with new sources.






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






49. The unit of service which we wish to know the cost for (hospital admission - classroom hour - course - etc.)






50. Any product - service - customer - contract - project - process or other work unit for which a separate cost measurement is desired.