Management Accounting, 1st edition, by Catherine Gowthorpe, Chapter 1
Quiz
Which one of the following statements about cost and management accounting is correct?
Cost accounting refers to information produced in sole trader and partnership businesses, whereas management accounting information is produced only by limited companies.
There is a considerable overlap between the use of the terms ‘cost accounting’ and ‘management accounting’.
‘Cost accounting’ is an old-fashioned term that is gradually being replaced by the term ‘management accounting’.
Cost accounting refers to the process of producing monthly reports, whereas management accounting reports are produced less frequently.
Which one of the following statements about cost and management accounting is incorrect?
Cost and management accounting is:
Produced as regularly and in as much detail as required by managers.
Helpful to managers for the purposes of controlling the business and making decisions.
Used only in very large businesses.
Oriented towards both past and future.
Which one of the following statements best describes cost and management accounting?
Cost and management accounting refers to the provision of information resources that:
Can be used by managers for decision-making and control of the business.
Helps the tax authorities in assessing the business for taxation.
Can be used for monitoring purposes by government departments.
Helps investors make buy, sell and hold decisions.
Which one of the following characteristics describes the overriding objective of the production of cost and management information?
Cost and management information should be:
Concise
Useful
Comparable
Detailed
Which one of the following is not a feature of cost and management accounting?
Cost and management accounting is:
Orientated towards the future.
Subject to a high level of regulation.
Extensively used in business organisations as a basis for decision-making.
Produced as frequently as required by business managers.
Which one of the following statements about cost and management accounting is accurate?
‘Cost accounting’ is an old-fashioned term that has now been replaced by ‘management accounting’.
The use of cost and management accounting information is restricted to very large business organisations.
There is a considerable overlap between the terms ‘cost accounting’ and ‘management accounting’.
Cost and management accounting used by the tax authorities as a basis for the calculation of corporation tax.
Which one of the following statements is accurate?
In the 1980s, Johnson and Kaplan argued that management accounting practices in the USA and other developed economies:
Had benefited from widespread computerisation.
Were outmoded and irrelevant.
Had adapted well to a service industry environment.
Required integration with financial reporting practices.
Which one of the following statements is correct?
Public sector organisations, in practice, rarely use management accounting techniques.
Private sector organisations typically express their objectives in terms of profitability.
Management accounting techniques were developed in the private sector and are inapplicable in other sectors of activity.
The CIMA definition of management accounting is relevant to all types of organisations.
Comparing management accounting with financial reporting, which one of the following statements is correct?
Management accounting:
Is more highly regulated.
Can be produced on a more timely basis.
Is usually produced less frequently.
Is oriented more towards the past.
Which one of the following functions is NOT included in the CIMA definition of management accounting?
Management accounting requires the identification, generation, presentation, interpretation and use of relevant information to:
Pay staff and creditors on a timely basis.
Determine capital structure and fund that structure.