Deck 10: Management and Cost Accounting Information

Question 1

Which one of the following statements about cost and management accounting is correct?

A)Cost accounting refers to information produced in sole trader and partnership businesses, whereas management accounting information is produced only by limited companies.
B)There is a considerable overlap between the use of the terms 'cost accounting' and 'management accounting'.
C)'Cost accounting' is an old-fashioned term that is gradually being replaced by the term 'management accounting'.
D)Cost accounting refers to the process of producing monthly reports, whereas management accounting reports are produced less frequently.

Answer 1

There is a considerable overlap between the use of the terms 'cost accounting' and 'management accounting'.

Question 2

Which one of the following statements about cost and management accounting is incorrect? Cost and management accounting is:

A)Used by managers in business decision-making.
B)Regulated by both UK and international financial reporting standards
C)Useful for monitoring costs and the use of business resources.
D)Produced as frequently as necessary.

Answer 2

Regulated by both UK and international financial reporting standards

Question 3

Which one of the following is not a feature of cost and management accounting? Cost and management accounting is:

A)Orientated towards the future.
B)Subject to a high level of regulation.
C)Extensively used in business organizations as a basis for decision-making.
D)Produced as frequently as required by business managers.

Answer 3

Subject to a high level of regulation.

Question 4

Which one of the following statements describes a significant drawback of financial accounting information?

A)It is presented in a highly aggregated form.
B)It is oriented towards future events.
C)It is geared towards the needs of users internal to the organization that produces it.
D)It is produced too frequently for users to easily assimilate it.

Question 5

Which one of the following statements about cost and management accounting is accurate?

A)'Cost accounting' is an old-fashioned term that has now been replaced by 'management accounting'.
B)The use of cost and management accounting information is restricted to very large business organizations.
C)There is a considerable overlap between the terms 'cost accounting' and 'management accounting'.
D)Cost and management accounting used by the HMRC as a basis for the calculation of corporation tax.

Question 6

Which one of the following statements about cost and management accounting is incorrect? Cost and management accounting is:

A)Produced as regularly and in as much detail as required by managers.
B)Helpful to managers for the purposes of controlling the business and making decisions.
C)Used only in very large businesses.
D)Oriented towards both past and future.

Question 7

Which one of the following characteristics describes the overriding objective of the production of cost and management information? Cost and management information should be:

A)Concise
B)Useful
C)Comparable
D)Detailed

Question 8

Which one of the following statements best describes cost and management accounting? Cost and management accounting refers to the provision of information resources that:

A)Can be used by managers for decision-making and control of the business.
B)Helps HMRC in assessing the business for taxation.
C)Can be used for monitoring purposes by various government departments.
D)Helps investors make buy, sell and hold decisions.

Question 9

Which one of the following statements about management accounting is correct?

A)The production of management accounting information is not subject to regulation in the form of financial reporting standards.
B)The management accounting statements produced by limited companies (but not by partnerships or sole traders) are subject to companies' legislation.
C)Companies must produce management accounting reports at least once a year in order to comply with Companies House filing requirements.
D)Only medium-sized and larger companies are required to produce management accounting information.

Question 10

Which one of the following statements best describes cost and management accounting? Cost and management accounting refers to the provision of information resources:

A)to shareholders of a company.
B)that managers can use to help them run the business.
C)in the form of statements of profit and loss and statements of financial position for submission to Companies House.
D)to customers and other interested user groups.