Question 1

All stakeholders need decision relevant information but management's decisions often require more detailed information

Accepted Answer

A) True 
 B)False  True

Question 2

Unlike financial accounting management accounting is unregulated and therefore cannot be relied on

Accepted Answer

A) True 
 B)False  True

Question 3

Management needs additional information to stay ahead of the other stakeholders

Accepted Answer

A) True 
 B)False  True

Question 4

Management accounting requirements are dependent upon the size and type of organisation

Accepted Answer

A) True 
 B)False

Question 5

Management accounting systems should provide:

Accepted Answer

A)   Up to date, accurate and detailed reports
B)   Up to date reports that are useful for decision making
C)   Up to date reports at a cost that does not outweigh their usefulness in decision making

Question 6

Management accounting:

Accepted Answer

A)   Is similar to financial accounting as it is only concerned with the past
B)   Is different to financial accounting as although it is concerned with the past it is more interested in the detail behind the summary numbers
C)   Is different to financial accounting because it is concerned with the future as well as the past and its concern with the past is more concerned with the detail behind the summary numbers

Question 7

Bankers as external users:

Accepted Answer

A)   Never use management accounts
B)   Sometimes require management accounts as a pre-condition of lending
C)   Always require management accounts before lending money

Question 8

Management are concerned with:

Accepted Answer

A)   Divisional profits and compliance with budgets
B)   The performance of the total business
C)   The overall performance of the business and the detailed breakdown of that performance

Question 9

Small business owners:

Accepted Answer

A)   Are more likely to rely on the financial accounting system to tell them how the business is doing than are managers of large enterprises
B)   Are more likely to rely on the management accounting system to tell them how the business is doing than are managers of large enterprises

Question 10

Accuracy is the holy grail of management accounting

Accepted Answer

A) True 
 B)False

Question 11

Bankers are:

Accepted Answer

A)   Only concerned with management accounts related to the past
B)   Only concerned with management accounts related to the future
C)   Concerned with both past and future oriented management reports

Question 12

As all stakeholders want the same thing one set of financial statements is enough

Accepted Answer

A) True 
 B)False

Question 13

Management accounting and financial accounting:

Accepted Answer

A)   Are based on different information sets
B)   Use common information in different ways
C)   Are mutually exclusive
D)   Have no connection with each other

Question 14

Management is only concerned with setting objectives and making strategic decisions on how to achieve those objectives

Accepted Answer

A) True 
 B)False

Question 15

There are no problems in relation to goal congruence among the stakeholder groups

Accepted Answer

A) True 
 B)False

Question 16

Management accounting is more concerned with the future than financial accounting

Accepted Answer

A) True 
 B)False

Question 17

If proper planning is carried out there is no need to monitor outcomes

Accepted Answer

A) True 
 B)False

Question 18

Techniques in management accounting such as break-even analysis:

Accepted Answer

A)   Provide all the tools and techniques necessary to run a business profitably
B)   Ensure that businesses do not go bust
C)   Provide management with an early warning system that then requires action

Exam 13: Internal Users and Internal Information

All stakeholders need decision relevant information but management's decisions often require more detailed information

Unlike financial accounting management accounting is unregulated and therefore cannot be relied on

Management needs additional information to stay ahead of the other stakeholders

Management accounting requirements are dependent upon the size and type of organisation

Management accounting systems should provide:

Management accounting:

Bankers as external users:

Management are concerned with:

Small business owners:

Accuracy is the holy grail of management accounting

Bankers are:

As all stakeholders want the same thing one set of financial statements is enough

Management accounting and financial accounting:

Management is only concerned with setting objectives and making strategic decisions on how to achieve those objectives

There are no problems in relation to goal congruence among the stakeholder groups

Management accounting is more concerned with the future than financial accounting

If proper planning is carried out there is no need to monitor outcomes

Techniques in management accounting such as break-even analysis: