Chapter 14 - Management and cost accounting information
Multiple-choice exercise
Choose the correct answer for each question.
Which of the following statements best describes cost and management accounting?
Cost and management accounting refers to the provision of information resources for management to present to shareholders on a regular basis
Cost and management accounting refers to the provision of information resources that have been highly aggregated in order to produce brief summarised statements
Cost and management accounting refers to the provision of information resources that business managers can use to help run the business
Cost and management accounting refers to the provision of information resources to help investors make decisions on whether to buy, sell or hold shares
Which of the following statements about cost and management accounting is not true?
Cost and management accounting is useful to management as a decision-making tool
Cost and management accounting is produced on a timely and frequent basis
Cost and management accounting is highly regulated via accounting standards
Cost and management accounting is oriented towards both past and future
Which of the following statements is true?
High levels of aggregation in financial accounting statements mean that it is not possible to derive much useful information about the nature of business costs
High levels of aggregation in financial accounting statements mean that they are very useful to management in decision-making
High levels of aggregation in financial accounting statements mean that a great deal of detailed information about business costs is made available to the public
High levels of aggregation in financial accounting statements mean that they are more useful than management accounting statements to assist in running the business
Which of the following statements is correct?
In the management accounting process, the provision of management information assists with reporting to interested parties outside the business
In the management accounting process, the provision of management information assists with ensuring that the business is not sued for breach of contract
In the management accounting process, the provision of management information assists with determining the level of directors' remuneration
In the management accounting process, the provision of management information assists with planning, control and decision-making
Which of these statements is true? i) Management accounting describes the process of collecting, collating and reporting information that is of use to the managers of a business for making decisions, for monitoring past performance and for making the most efficient use of resources. ii) Cost accounting describes the process of identifying and accumulating the costs of business operations in a way that is helpful in valuing stock and in identifying the costs and profitability of different departments or divisions of a business.