Question 1

There are four steps in the decision-making process. The final step in this process is to:

Accepted Answer

The final step in the decision-making process is to choose the course of action which will help the business achieve its goals. This is the ultimate objective of the decision-making process where the decision-maker evaluates all available alternatives and selects the best one that aligns with the organization's goals.

Question 2

Which of the following has been the most influential in redefining the role of accountants as analysts and decision makers rather than as mainly number-crunchers?

Accepted Answer

The development of information and communications technology has significantly changed the role of accountants by automating routine tasks and enabling them to focus more on analysis and decision-making.

Question 3

Internal decision makers:

Accepted Answer

Internal decision makers refer to those who are responsible for managing the day-to-day activities of the business, such as the managers. The shareholders are external decision makers as they invest in the company but do not have a direct role in managing it. The customers and government regulators can also have an impact on business decisions, but they are not considered internal decision makers.

Question 4

The job of the modern accountant is a challenging one and requires accountants to keep up with, and manage, a changing business environment. The most important skills required of the modern accountant are:

Accepted Answer

The job of the modern accountant goes beyond simply keeping records and performing mathematical calculations. They need to be able to analyze financial information, communicate effectively with clients and colleagues, and adapt to new technologies and business practices. Therefore, analytical and communication skills are the most important skills required of the modern accountant.

Question 5

The consideration of economic factors is very important in the decision-making process. Which of the following must also be considered?

Accepted Answer

All of the listed factors (economic, environmental, government policy, and social) must be considered in the decision-making process. Ignoring any one of these factors could lead to biased or incomplete decisions that do not fully address the impacts and consequences of the decision. Therefore, it is important to consider all factors when making decisions that affect multiple stakeholders and have far-reaching consequences.

Question 6

Which type of information would be of most interest to a manufacturing manager?

Accepted Answer

As a manufacturing manager, the total number of warranty claims made by customers would be of most interest because it directly relates to the quality of the products being made. This information would allow the manager to identify areas for improvement in the manufacturing process to reduce the number of warranty claims and improve customer satisfaction. Net profit, annual dividends paid to shareholders, and compliance with accounting standards are important, but they are not as directly related to the manufacturing process as warranty claims.

Question 7

Communication is the final stage of the accounting process and is considered to require the most extensive:

Accepted Answer

Communication involves conveying financial information to various stakeholders, such as investors, creditors, and management. This requires extensive training, business experience, and professional judgement to ensure that the information is accurate, relevant, and understandable to the users of financial statements. While planning, measurement, and record-keeping are important aspects of the accounting process, they do not require as much extensive communication as the final stage.

Question 8

An example of a question raised by an external decision maker is:

Accepted Answer

External decision makers, such as investors or creditors, are interested in the financial health of a business to make informed decisions about investing or lending.

Question 9

Accounting is defined as the process of identifying, __________, recording and communicating economic information to permit informed judgements and economic decisions by users of the information.

Accepted Answer

The definition of accounting refers to measuring economic information, which is the process of quantifying financial transactions and events to develop financial reports. Therefore, measuring is the most appropriate choice. Verifying means conducting a review or examination to ensure the accuracy of information, which is only a part of the accounting functions. Interpreting is the process of analyzing and explaining financial information and its meaning and implications, which falls under the purview of financial analysts. Processing refers to the systematic handling of financial information, which is the function of bookkeeping or accounting systems.

Question 10

How many of the following decisions would be made by internal as opposed to external decision makers: resource requirements for production, product pricing, cash management, and monitoring compliance with environmental regulators?

Accepted Answer

Resource requirements for production, product pricing, and cash management are decisions typically made by internal decision-makers within a company, such as managers and executives. Monitoring compliance with environmental regulators, while it involves internal efforts, is dictated by external standards and often involves external oversight, making the other three choices internal decisions.

Question 11

The recording or recording-keeping process involves measuring and recording business __________

Accepted Answer

Transactions refer to the actual activities or events that affect a company's financial position, such as sales, purchases, and expenses. These transactions are measured and recorded to keep track of the company's financial performance and inform decision-making. Contracts, deals, and agreements may be related to transactions, but they do not capture the actual economic activity the way transactions do.

Question 12

Which of the following is an example of the use of accounting information?

Accepted Answer

All of the given options are examples of how accounting information can be used. Accounting information is used by business owners to make informed decisions about their operations, by shareholders to evaluate the financial performance of a company, and by banks to assess a business's creditworthiness when considering lending decisions.

Question 13

Special purpose financial statements provide information to be used by which of these parties?

Accepted Answer

Special purpose financial statements are designed for a specific purpose or user, and in this case, they are intended for internal management and some external users such as financial institutions and government agencies. Suppliers and board of directors are not usually the main users of special purpose financial statements.

Question 14

The term 'special purpose financial statements' refers to the fact that the information in the reports is:

Accepted Answer

Special purpose financial statements are prepared for users who have specialized needs and have the authority to obtain the required information. These users may include owners, lenders, or regulatory bodies who need more specific information about an organization's financial performance. The reports may be tailored to meet the specific needs of these users, rather than providing general information for a wider audience.

Question 15

The depreciation of machinery used in the production of goods is which of the following?
$$\begin{array}{l}
&\text { Iratemal transaction } & \text { Extenpl trarisaction }\
 a.  & \text { Yes } & \text { Yes } \
 b.  & \text { No } & \text { No } \
 c.  & \text { No } &  \text { yes } \
d.  & \text { Yes } & \text { No }
\end{array}$$

Accepted Answer

The answer of The depreciation of machinery used in the...

Question 16

External decision makers can be divided into four groups. To which of these groups do unions belong?

Accepted Answer

The answer of External decision makers can be divided into...

Question 17

For Fashions R Us Ltd how many of the following are internal decision makers: bank manager, supplier, human resource manager, managing director?

Accepted Answer

The human resource manager and managing director are internal decision makers within the company. The bank manager and supplier are external parties.

Question 18

Who of the following is not an external decision maker?

Accepted Answer

The finance director is an internal decision maker, as they are part of the company's management team. The other three options are external decision makers who have an impact on the business but are not directly involved in its management.

Question 19

Financial reports prepared for a variety of external users who are unable to obtain the accounting information for their own specific needs are known as:

Accepted Answer

The description provided accurately describes general purpose financial statements, which are prepared for external users who have diverse information needs and cannot obtain specialized reports tailored to their specific needs.

Question 20

How many of the following decisions would be made by external as opposed to internal decision makers: choosing which products to produce, determining how much is owing to creditors, assessing an application for a loan, and employing additional staff?

Accepted Answer

The answer of How many of the following decisions would...

Quiz 1: Decision Making and the Role of Accounting