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Test your basic knowledge |
ACCA Financial Management
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Study First
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. The idea that a dollar today is worth more than a dollar in the future.
Depreciation
Strategic planning
Net working capital
Time value of money
2. Expenses that have been incurred - but not yet paid.
Total revenue
Statement of operations
Investor
Accrued expenses
3. The elapsed time between when the patient or third-party payor sends the payment and the time the health care provider receives the payment.
Other revenues
Collections policies and procedures
Mail float
Annuity
4. 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.
Mutually exclusive projects
Ending inventory
Step-down method
Discounting
5. The revenue that the organization has a right to collect. It is computed as: gross patient service revenues – contractual allowance and charity care.
Revenue rate variance
Net patient service revenue
Annuity
Float
6. The increase in the value of an investment from the time it is purchased until the time it is sold.
Clinical cost centers
ROI
Opportunity cost
Capital appreciation
7. A security interest in one or more assets granted to lenders in a secured loan.
Long-term financing
Cost Accounting
Lien
Income from investments
8. 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.
Fixed supplies budget
Allocation base
IRR
Retained earnings
9. The amount expected to be collected from payors. It is calculated as: gross accounts receivable – discounts and allowances – allowance for un-collectibles.
Profit margin
FV
Net accounts receivable
Non-regular cash flows
10. 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.
Indirect costs
Product diversity
Other income
Fully allocated costs
11. The amount of supplies used to provide a service or good.
Profitability ratios
Tax-exempt bonds
Cost of goods sold
Co-payments
12. 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
Long-term investments
Statement of operations
ROI
Properties and equipment - net
13. The absence of risk in an investment.
Basic accounting equation
Parent organization
Certainty
Discount rate
14. Portion of the profits the organization keeps in-house to use in support of its mission.
Retained earnings
Revenue budget
Basis of Allocation
Temporarily restricted net assets
15. The activities of an organization directly related to its main line of business.
Investment centers
Breakeven point
Operating activities
ABC
16. [Inventory/ (Cost of Goods Sold/365)]
Average Days Inventory
Cost
Revenue enhancement
Asset Management ratios
17. Activities that provide guidance and feedback to keep the organization within its budget - such as staff meetings - regular reports - and bonuses.
Controlling activities
Operating revenues
SWOT analysis
Discounted cash flows
18. 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.
Accumulated depreciation
Loan amortization schedule
Cost avoidance
Compounding
19. That process of budgeting where the environmental assessment and planning of future activities are largely decided upon by a few individuals - and the budget is essentially dictated to the rest of the organization. Often called authoritarian approach
Mutually exclusive projects
Average payment period
Volume diversity
Top-down budgeting
20. Operating income plus other income. This is analogous to net income before taxes in for-profit entities.
Accounts payable
Product diversity
Current liabilities
Excess of revenues over expenses
21. The difference between the initial amount paid for an investment and the related future cash inflows after they have been adjusted (discounted) by the cost of capital.
Capital
Capital structure ratios
Lease
Net present value
22. Literally non-movable assets. Generally used to refer to buildings and equipment.
Time value of money
Fixed assets
Responsibility center
Collection float
23. General and administrative expenses. Operating expenses that are not contained in the labor or supplies budgets.
Annuity
Non-operating expenses
G & A expenses
Hedge
24. The budget that projects the organization's cash inflows and outflows. The bottom line in the cash budget is the amount of cash available at the end of the period.
Collections policies and procedures
Cash budget
Revenue enhancement
Profit margin
25. Return on investment. The percentage gain or loss experienced from an investment.
Operating expenses
ROI
Capital structure ratios
Ending inventory
26. An entity that temporarily grants the use of money or an asset to another in return for compensation - usually in the form of interest.
Operating budget
Activity Based Costing
Lender
Average Days Inventory
27. Agencies that assess the "credit worthiness" of an organization. The two major rating agencies are Moody's and Standard & Poor.
Periodic payments
Bond rating agency
Ending inventory
Operating income
28. [operating income/total operating revenues]- The proportion of profit remaining after subtracting total operating expenses from operating revenues.
Profit margin
Permanently restricted net assets
Operating margin
Revenue enhancement
29. Amounts the organization is obligated to pay others - including suppliers and creditors.
Cash flows from operating activities
Financing activities
Accounts payable
Cost centers
30. The system of accounting that recognizes revenues when cash is received and expenses when cash is paid out. See also Accrual basis of accounting.
Operating cash flows
Intermediate Cost Object
Footnotes
Cash basis of accounting
31. The budget that forecasts the operating and - in some cases - the non- operating revenues that will be earned during the budget period.
Revenue budget
Net patient service revenue
Discount rate
Direct costs
32. The elapsed time between financial statements. Common accounting periods
Average Days Inventory
Program budget
Accounting period
Strategic financial planning
33. 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.
Horizontal analysis
FV
Line of credit
Assets
34. Previously restricted assets no longer restricted because the terms of the restriction have been met.
Net assets released from restriction
Strategic financial planning
Base Budget
Other support
35. Highly liquid current assets such as interest-bearing savings and checking accounts.
Asset Management ratios
Revenues
Cash equivalents
Average payment period
36. Recording expenses associated with making revenue at the same time as revenues are recognized
Capital structure decision
Investment grade
Matching principle
G & A expenses
37. [Net Accounts Receivable/(Revenue/356)]
Average Days Receivable
Line-item budget
Effectiveness
Assets
38. Assets = Liabilities + Net Assets (aka Equity).
Capital appreciation
Single/Simple Step
Current liabilities
Basic accounting equation
39. 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.
Notes payable
Cost
Capital budget
Cash basis of accounting
40. Amounts due to the organization from patients - third parties - and others.
Statement of cash flows
Accounts receivable
Basis of Allocation
Footnotes
41. Portion of profit an organization distributes to investors. By law - only investor-owned health care organizations can distribute dividends outside the organization.
Temporarily restricted net assets
Dividends
Cost of capital
Times interest earned
42. Each service center
Controlling activities
Single/Simple Step
Quick ratio
Tangible assets
43. Being subject to sanctions with respect to carrying out responsibilities.
Net present value
Performance measure
Accountability
Current assets
44. Policies and procedures that address when and how to collect revenues - such as paying at time of service - sending accounts to collection agencies - and writing off accounts as bad debt.
Operating budget
Collections policies and procedures
Bond rating agency
Fixed assets
45. process of measuring the resources (costs) used to produce results.
Temporarily restricted net assets
Cost Accounting
For-profit
Net increase (decrease) in cash and cash equivalents
46. Series of payments over time - such as interest paid to bondholders.
Tax-exempt bonds
Spillover cash flows
Basis of Allocation
Periodic payments
47. One of the four major financial statements of a health care organization. It presents a summary of the organization's assets - liabilities - and net assets as of a certain date.
Common costs
Tangible assets
Balance sheet
Float
48. The purchase of assets with contributed and internally generated funds. See also Debt financing.
Incremental cash flows
Equity financing
Cost centers
Expense cost variance
49. How an organization chooses to finance its working capital needs.
Cash basis of accounting
Operating revenues
Financing mix
Not-for-profit
50. 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.
Budget variance
Strategic planning
ROI
Common costs