Professional School of Business

Where Learners Are Achiever

Management Information

Time: 36 Minutes MA 1
Marks: 30

1. A companys accounting system operates so that the cost accounts are

independent of the financial accounts. The two sets of accounts are
reconciled on a regular basis to keep them continuously in agreement.
What is this type of accounting system known as?
A. Independent accounts
B. interlocking accounts
C. reconciled accounts
D. integrated accounts

2. Which of the following is a disadvantage of batch processing?

A. Information will not always be up to date.
B. It is not suitable for internal regular tasks
C. A missing record cannot be located
D. Batches sent off for processing cannot be tracked

3. Which of the following statements, relating cost ledger accounting, are TRUE?
1. An integrated system is one where separate ledgers are kept for cost
accounting and management accounting.
2. An interlocking system is one where there is just one system of ledger
accounts for cost accounting and for management accounting.
A. Both statements are correct
B. Neither statements is correct
C. Statement 1 is correct but statements 2 is incorrect
D. Statement 2 is correct but statement 1 is incorrect

4. Which of the following statements relate to the policy manual of an

organization?
1. Policies should be in place to deal with the authorization of the purchase
of fixed assets.
2. Employees will need to know where to find the policy manual to refer to
but need not have read it.
3. Strict adherence to the manual can lead to inflexibility
A. All three
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only

5. Which of the following are primary data?

i) Information on timesheets used for making up wages
 ii) Information from a government publication concerning forecast
inflation rates used for budgeting
iii) Information from a trade publications used to choose a supplier of
raw materials

A. i and ii B. i and iii C. i only

D. i, ii and iii

6. Which of the following is not management accounting information?

A. Sales budget B. Variance report C. Payroll report
D. Profitability report

7. Which of the following statements is incorrect?

A. Management accounting reports are more accurate than financial
accounting statements
B. Management accounting reports are more detailed than financial
accounting statements
C. Management accounting reports are more detailed than financial
accounting statements
D. Management accounting reports are not disclosed to shareholders and
investors

8. Which one of the following would be included in the financial accounts, but
may be excluded from the cost accounts?
A. Bank interest and charges
B. Depreciation of storeroom handling equipment
C. Direct material costs
D. Factory managers salary

9. What is the main purpose of prime entry records?

A. To calculate the cash received and spent by a business
B. To prevent a large volume of unnecessary detail in the ledger
C. To provide a monthly check on the double entry bookkeeping
D. To separate the transactions subject to sales tax from those that are
exempt

10.Which of the following statements about on organization chart is untrue?

A. An organization chart provides a summary of the structure of a business
B. An organization chart can improve internal communications within a
business
C. An organization chart can improve employees understanding of their role
within a business
D. An organization chart cannot indicate authority within a business

11.Which of the following combinations describe the purposes of management

information?
A. Planning, negotiating and decision making
B. Control, decision making and publication
C. Decision making, negotiating and implementing
D. Planning, control and decision making
12.Which of the statement about management accounting are TRUE?
1. Management accounts are a legal requirement for a company
2. Management accounts consider future data only
3. Management accounts include financial and non-financial information

A. 1 and 3 only B. 2 and 3 only C. 2 only D.

3 only

13.Which of the following is a feature of financial accounting information?

A. It is used to calculate the cost of product or service
B. Limited companies are required by law to prepare this information
C. It is concerned with future results as well as historical information
D. The benefit must exceed the cost and it must be relevant for purpose

14.Which of the following statements is correct?

A. Cost accounting is only relevant to manufacturing organizations
B. Management accounts must be presented in a regulated format
C. Financial and management accounts are prepared from completely
separate sets of data
D. Management accounts are normally prepared for internal use within a
company

15.How would facts and figures which have been processed and communicated
to another party be best described?
A. Data B. Statistics C. Information D.
Coding
1. B
2. A
3. B
4. C
5.C
6.C
7.A
8.A
9.B
10.D
11.D
12.D
13.B
14.D
15.C