Accounting For Management And Sources Of Data

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| By Natashanelesh

Natashanelesh

Community Contributor

Quizzes Created: 5 | Total Attempts: 10,031

Questions: 10 | Attempts: 187 | Updated: Mar 22, 2023

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The questions are set as per ACCA standards and are hence worded to confuse students.
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Number of Questions: 10 questions
Time Available: 13 minutes
Total Marks: 10 marks
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Questions and Answers

1.

Which of the following statements are true? (i) The main users of financial accounting information are external to an organisation. (ii) Cost accounting is that part of financial accounting which records the cash received and payments made by an organisation.
- A.
  
  Statements (i) and (ii) are both correct.
- B.
  
  Only statement (i) is correct.
- C.
  
  Only statement (ii) is correct.
Correct Answer
B. Only statement (i) is correct.

Explanation
Statement (i) is correct because the main users of financial accounting information, such as investors, creditors, and government agencies, are external to an organization. They rely on financial statements to make decisions about the organization.

Statement (ii) is incorrect because cost accounting is not a part of financial accounting that records cash received and payments made by an organization. Cost accounting focuses on the analysis and allocation of costs within an organization to help with internal decision-making and control.

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2.

Data is information that has been processed in such a way as to be meaningful to its recipients.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The statement that data is information that has been processed in such a way as to be meaningful to its recipients is incorrect. Data refers to raw facts and figures that have not been processed or organized, whereas information is the result of processing and organizing data in a meaningful way. Therefore, the correct answer is false.

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3.

The cost of producing information should be greater than the value of the benefits of that information to management.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The statement suggests that the cost of producing information should be greater than the value of the benefits to management. However, this is not true. In order for information to be valuable to management, the benefits should outweigh the cost of producing it. Otherwise, it would not make sense for management to invest in acquiring information that does not provide sufficient value. Therefore, the correct answer is false.

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4.

Information is processed data.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Information refers to processed data that has been organized and structured in a meaningful way, making it useful and understandable. Data, on the other hand, refers to raw and unprocessed facts and figures. Therefore, it is correct to say that information is processed data.

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5.

Which one of the following statements is correct?
- A.
  
  Management accountants are responsible for planning, decision-making and control.
- B.
  
  The purpose of a cost accounting system is to collect information about costs.
- C.
  
  A management accounting system provides all the strategic and tactical information required by management.
- D.
  
  Management accounting information should be timely and relevant, but does not need to be 100% accurate.
Correct Answer
D. Management accounting information should be timely and relevant, but does not need to be 100% accurate.

Explanation
Management accountants provide information for decision-making but do not make the decisions themselves. A cost accounting system gathers data, not information. Management accounting systems provide some but not all the information needed for strategic and tactical planning. Information should be timely and relevant: it should also be reliable but need not be 100% accurate.

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6.

A company is preparing a budget for an advertising campaign that the sales director has just ordered, subject to approval of the costs. The campaign is expected to last for just over six months. The advertising budget is an example of:
- A.
  
  Strategic planning
- B.
  
  Tactical planning
- C.
  
  Operational planning
Correct Answer
B. Tactical planning

Explanation
Budgets are a form of tactical plan, even when they do not extend over a one-year financial period.

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7.

Which of the following are examples of secondary data? (i) A count of the number of invoices that we are issuing each week (ii) The average wage of the population taken from government census results (iii) The average wage paid to our employees (iv) The sales for the month as reported on a website
- A.
  
  (i) and (ii)
- B.
  
  (iii) and (iv)
- C.
  
  (i) and (iii)
- D.
  
  (ii) and (iv)
Correct Answer
C. (i) and (iii)

Explanation
Secondary data refers to data that has been collected by someone else for a different purpose. In this case, option (i) is an example of secondary data because it involves counting the number of invoices issued each week, which is likely data that has been collected by the company for their own internal purposes. Option (iii) is also an example of secondary data because it involves the average wage paid to the company's employees, which is likely data that has been collected by the company for their own payroll purposes.

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8.

A sample of people is taken with the same proportion of individuals in separate age bands as in the population as a whole. This is an example of which type of sampling?
- A.
  
  Random sampling
- B.
  
  Systematic sampling
- C.
  
  Stratified sampling
- D.
  
  Cluster sampling
Correct Answer
C. Stratified sampling

Explanation
Stratified sampling is the correct answer because it involves dividing the population into different groups or strata based on certain characteristics, such as age bands in this case. Then, a sample is taken from each stratum in proportion to the population size of that stratum. This ensures that the sample represents the diversity within the population and allows for more accurate analysis and generalization of the results.

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9.

It was decided to take a sample by selecting the 12th item and thereafter every 20th item. This is an example of which type of sampling?
- A.
  
  Random sampling
- B.
  
  Systematic sampling
- C.
  
  Stratified sampling
- D.
  
  Cluster sampling
Correct Answer
B. Systematic sampling

Explanation
Systematic sampling is a type of sampling where the elements are selected at fixed intervals from a list or population. In this case, the decision to select the 12th item and every 20th item thereafter indicates a systematic sampling approach. This method ensures that every 20th item is included in the sample, providing a representative sample of the population.

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10.

Which of the following statements about stratified sampling is true?
- A.
  
  The sample will not be representative
- B.
  
  The structure of the sample will not reflect that of the population
- C.
  
  Knowledge is needed of each item in the population
- D.
  
  The sample is chosen entirely at random
Correct Answer
C. Knowledge is needed of each item in the population

Explanation
Stratified sampling involves dividing the population into different groups or strata based on certain characteristics. In order to conduct stratified sampling, knowledge is needed about each item in the population to accurately classify them into the appropriate strata. This ensures that each stratum is represented in the sample proportionally to its presence in the population, increasing the representativeness of the sample. Therefore, the statement "Knowledge is needed of each item in the population" is true for stratified sampling.

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Current Version
Mar 22, 2023

Quiz Edited by
ProProfs Editorial Team
Jul 31, 2012

Quiz Created by
Natashanelesh

Accounting For Management And Sources Of Data

Which of the following statements are true? (i) The main users of financial accounting information are external to an organisation. (ii) Cost accounting is that part of financial accounting which records the cash received and payments made by an organisation.

Data is information that has been processed in such a way as to be meaningful to its recipients.

The cost of producing information should be greater than the value of the benefits of that information to management.

Information is processed data.

Which one of the following statements is correct?

A company is preparing a budget for an advertising campaign that the sales director has just ordered, subject to approval of the costs. The campaign is expected to last for just over six months. The advertising budget is an example of:

Which of the following are examples of secondary data? (i) A count of the number of invoices that we are issuing each week (ii) The average wage of the population taken from government census results (iii) The average wage paid to our employees (iv) The sales for the month as reported on a website

A sample of people is taken with the same proportion of individuals in separate age bands as in the population as a whole. This is an example of which type of sampling?

It was decided to take a sample by selecting the 12th item and thereafter every 20th item. This is an example of which type of sampling?

Which of the following statements about stratified sampling is true?