MA - Ch. 1

The following statements relate to financial accounting or to cost and management accounting:

1. (1) The main users of financial accounting information are external to an organisation

2. (2) Cost accounting is part of financial accounting and establishes costs incurred by an organisation

3. (3) Management accounting is used to aid planning, control and decision making

Which of the statements are correct?

• 1. 1 and 2 only

• 1. 1 and 3 only

• 1. 2 and 3 only

• 1. 1, 2 and 3

Which of the following statements about strategic planning are correct?

1. (1) It is concerned with quantifiable and qualitative matters

2. (2) It is mainly undertaken by middle management in an organisation

3. (3) It is concerned predominantly with the long term

• 1. 1 and 2 only

• 1. 1 and 3 only

• 1. 2 and 3 only

• 1. 1, 2 and 3

What is the purpose of management information?

• 1. Planning only

• 1. Planning and control only

• 1. Planning, control and decision-making only

• 1. Planning, control, decision-making and research and development

Which of the following describes the control process?

• 1. The action of monitoring something to keep it on course

• 1. The choice between alternatives

• 1. The development of strategies to achieve objectives

• 1. The establishment of a plan for a future period

Which TWO of the following are characteristics of management accounting information?

• 1. Non-financial as well as financial

• 1. Used by all stakeholders

• 1. Concerned with cost control only

• 1. Not legally required

Which TWO of the following statements about cost and management accounting are true?

• 1. Cost accounting cannot be used to provide inventory valuations for external financial reporting

• 1. There is a legal requirement to prepare management accounts

• 1. The format of management accounts may vary from one business to another

• 1. Management accounting provides information to help management make business decisions

Which TWO of the following are characteristics of management accounting information?

• 1. Forward looking

• 1. Legally required

• 1. Concerned with cost control

• 1. Follows clearly defined standards

The following descriptions relate to management information:

1. (1) Clear to the user

2. (2) Detailed and completely accurate

3. (3) Provided whatever the cost

4. (4) Relevant for purpose

8. Which of the above are necessary features of useful management information?

• 1. 1 and 2 only

• 1. 1 and 4 only

• 1. 2 and 4 only

• 1. 1, 2 and 3 only

Which of the following only contains essential features of useful management information?

• 1. Accurate, clear, presented in report format

• 1. Timely, reliable, supported by calculations

• 1. Regular, complete, communicated in writing

• 1. Clear, accurate, relevant for its purpose

The following descriptions relate to features of management information:

1. (1) Communicated in writing

2. (2) Presented in report format

3. (3) Supported by calculations

4. (4) Timely and clear to the user

6. Which of the above are necessary features of useful management information?

• 1. 4 only

• 1. 2 and 3 only

• 1. 1 and 4 only

• 1. 1, 2 and 3 only