Management Information

Question 1

Planning

Answer 1

Establishing an objective/identify a problem then choose a strategy to achieve the objective/alleviate the problem

Question 2

Vision

Answer 2

Set what to achieve / Long term aspiration

Question 3

Goal

Answer 3

General statements of how to achieve vision / Medium-Long term aspiration

Question 4

Objectives

Answer 4

Aim of organisation

S M A R T statements of the goal / Short-Medium term aspiration

S - Specific
M - Measurable
A - Achievable
R - Realistic
T - Time-bounded

Question 5

Budget

Answer 5

Financial plans based on action plan

1 year –> follow action plan timeframe

Question 6

Strategy/Action plan

Answer 6

Possible course of action/ Detailed plans to achieve objective

Question 7

Are planning & decision-making linked?

YES/NO

Answer 7

YES

You decide to plan in the first place and the plan you make is a collection of decisions

Question 8

Main internal source of management information

Answer 8

• Accounting records
• Personnel records
• Production department records
• Detailed time records

Question 9

Is non-financial information less important to managers compared to financial information ?

YES/NO

Answer 9

NO

Non financial information must be monitored carefully, recorded accurately & taken into account as fully as financial information

Question 10

Trainee accountant job scope :

Answer 10

1) Produce regular performance statements
2) Review product costs
3) Assess product’s profitability
4) Put value to inventories

Question 11

Cost centre

Answer 11

Essential building blocks of a costing system

Collecting place for overheads

Etc : Production/service location, function, activity, item of equipment

Question 12

Cost unit

Answer 12

A unit of product/service which has costs attached to it

Question 13

Cost centre is also known as……?

Answer 13

Responsibility centre

Department/organisational function whose performance is the direct responsibility of a specific manager

Question 14

Transaction files

Answer 14

Contains records related to individual transactions

Etc : Invoices

Question 15

Master files

Answer 15

Contains ‘standing’ or reference data and cumulative transaction data (such as year-to-date figures)

Question 16

Files

Answer 16

Collections of records with similar characteristic

Etc : Payable ledger

Question 17

Records

Answer 17

Consists of data relating to one unit of information.

Consists of several fields.

Etc : Supplier account in payable ledger

Question 18

Fields

Answer 18

Item of data relating to a record

Etc : Account number of supplier, credit limit, name

Question 19

Key field

Answer 19

Each record in a file includes a key field – an item of data used to identify it.

Etc : Unique supplier code

Question 20

Efficient & effective coding system

Answer 20

• Easy to use & communicate
• Unique code
• Allow for expansion
• Flexible
• Comprehensive
• Brief
• Minimise error
• Uniform (same length & structure)
• Significant

Question 21

Block/Group codes

Answer 21

Improvement of sequential code

1st digit indicates the classification

Question 22

Faceted codes

Answer 22

Improvement of block/group code

Each digit of the code gives information about an item

Question 23

Hierarchical code

Answer 23

Type of faceted code

Each digit further to the right represents a smaller subset than those to the left

Question 24

Advantage of faceted code

Answer 24

Give users the ability to find items based on more than one criteria

Question 25

Features of computerised accounting software

Answer 25

1) Real-time processing 2) Separate modules 3) Link between modules 4) Enforce accountancy rules 5) Automated period-end routines 6) Queries & reporting

Question 26

Principle of responsibility accounting

Answer 26

Managers should only be judged or held accountable for costs they can influence or control

Question 27

Key features of profit centre

Answer 27

1) Organisational hierarchy - sits higher than cost centre 2) Seniority of profit centre managers 3) External & internal revenue 4) From cost centre to profit centre

Question 28

Vertical communication

Answer 28

Up/Down the hierarchy Etc : CEO gave objective and pass it to head of department

Question 29

Horizontal communication

Answer 29

Between members of the same team Etc : team meeting

Question 30

What is CC in an email

Answer 30

Carbon Copy --> send a copy of the email --> not the intended recipient --> intended recipient know about the CC

Question 31

What is BCC in an email

Answer 31

Blind Carbon Copy --> send a copy of the email --> not the intended recipient --> without the knowledge of intended & CC'd recipients BCC recipients know to whom the email has been sent and CC’d;

Question 32

Memorandums

Answer 32

Concise formal statements issued to communicate something important to the intended recipient

Question 33

Features of cost accounting but not in financial accounting

Answer 33

- Notional rent - Marginal costing - Cost unit