Deck 13: Internal Users and Internal Information

Question 1

Bankers as external users:

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

Answer 1

A

Question 2

Management accounting:

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

Answer 2

C

Question 3

Techniques in management accounting such as break-even analysis:

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

Answer 3

C

Question 4

Accuracy is the holy grail of management accounting

Question 5

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

Question 6

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

Question 7

Management accounting systems should provide:

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 8

Small business owners:

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 9

Management are concerned with:

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 10

Management needs additional information to stay ahead of the other stakeholders

Question 11

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

Question 12

Management accounting is more concerned with the future than financial accounting

Question 13

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

Question 14

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

Question 15

Management accounting and financial accounting:

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 16

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

Question 17

Bankers are:

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 18

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