Question 1

The 'vision' of an organisation:
A) refers to the desired future state of an organisation
B) refers to a statement that defines the purpose of the organisation
C) refers to specific statements of objective,upon which goals can be set
D) is only useful for non profit organisations

Accepted Answer

The 'vision' of an organisation refers to the desired future state of an organisation. It is a broad, aspirational statement of what the organisation seeks to achieve in the long term. It is not the same as the purpose or mission statement, which defines the reason for the organisation's existence. It is also different from specific objectives, which are measurable and achievable milestones that help the organisation achieve its vision. The concept of a vision is not limited to non-profit organisations, as it is applicable to any organisation that seeks to establish a long-term direction for itself.

Question 2

Eddy Gunn is a management accountant.Which of following is most likely to be Eddy's responsibility?
A) Providing an environmental assurance report for his company's shareholders
B) Compiling the company tax return
C) Ensuring that the internal accounting system is compliant with generally accepted accounting standards
D) Developing a production cost report for each of the company's three production lines

Accepted Answer

As a management accountant, one of Eddy's main responsibilities would be to provide management with relevant financial information to help them make informed decisions. Developing a production cost report for each of the company's three production lines would be a task that helps management understand the cost structure of their products and make adjustments as necessary to improve profitability. Providing an environmental assurance report (A) would typically fall under the purview of an environmental auditor or specialist. Compiling the company tax return (B) would typically be the responsibility of a tax accountant. Ensuring that the internal accounting system is compliant with generally accepted accounting standards (C) would typically fall under the responsibilities of a financial accountant or controller.

Question 3

Which of the following statements is correct?
A) The primary objective of a firm's management is to increase firm value.
B) The management accounting system needs to accumulate information from both internal and external sources.
C) Managers may be faced with a conflict between increasing customer value and increasing shareholder value.
D) All the given statements are correct.

Accepted Answer

All the given statements are correct as they reflect common objectives and challenges in management and accounting practices.

Question 4

Which of the following are key influences on management accounting systems?
i.Increased globalisation
ii.Computerised production systems
iii.The number of employees
iv.Supply chain management
A) i,ii and iv
B) ii,iii and iv
C) i,iii and iv
D) i,ii,iii and iv

Accepted Answer

Increased globalisation affects the markets, competition and tax laws in which companies operate, therefore influencing the design of management accounting systems. Computerized production systems automate processes and generate large amounts of data, which require new management accounting techniques to be implemented. Supply chain management impacts the cost structure and the allocation of resources, which also requires changes in management accounting systems. The number of employees does not have a direct influence on management accounting systems, therefore option iii is not correct.

Question 5

Which of the following statements is correct?
A) Management accounting is a subset of cost accounting.
B) Cost accounting is a subset of management accounting.
C) Cost accounting is no longer required in today's competitive environment.
D) Management accounting in today's environment is the same as it was many years ago.

Accepted Answer

While both management accounting and cost accounting deal with accounting information, cost accounting focuses specifically on tracking and analyzing costs associated with production, while management accounting encompasses a broader range of accounting functions such as budgeting, forecasting, and decision-making. Therefore, cost accounting is a subset of management accounting, not the other way around. Additionally, cost accounting is still relevant today as companies must have a handle on their costs in order to remain competitive. Finally, while some aspects of management accounting may have changed over time, the core principles and techniques remain relevant in today's environment.

Question 6

Animus Ltd is a mining company.Which of the following is an example of 'planning'?
A) Awarding bonuses to Aimus Ltd's top performing executives
B) Setting production targets for the company's new mines
C) Developing correction actions to respond to lower-than-expected production levels in the existing mines
D) Pursuing legal actions against environmental activists who stole mining equipment

Accepted Answer

Setting production targets for the company's new mines is an example of planning, as it involves making decisions about future goals and objectives for the company. The other options involve either rewarding past performance (A), responding to current problems (C), or pursuing legal action (D), which are not directly related to planning for the future.

Question 7

Choose the statement that best completes this sentence: 'All management accounting information …'
A) has a focus on past costs
B) has a focus on future costs
C) is collected as required by internal management of the firm
D) is constrained by the requirements of the Australian Accounting Standards

Accepted Answer

Management accounting information is primarily collected to meet the specific needs of internal management for decision-making, planning, and control purposes, rather than being constrained by external standards or focusing solely on past or future costs.

Question 8

The focus of management accounting over time has changed.Which is the correct historical order for the following foci?
i.Cost
ii.Profitability
iii.Resource management
iv.Waste reduction
A) i,ii,iii and iv
B) ii,iii,i and iv
C) i,ii,iv and iii
D) i,iii,iv and ii

Accepted Answer

The answer of The focus of management accounting over time...

Question 9

Which of the following is the most logical sequence for a commencing organisation?
A) Control,feedback,planning
B) Planning,control,feedback
C) Feedback (feedforward),planning,control,feedback
D) Control,planning,feedback

Accepted Answer

A logical sequence for a commencing organization would be to first establish a plan, then implement controls to ensure that the plan is being carried out effectively, and finally provide feedback to evaluate the success of the plan and inform future planning decisions. Therefore, the correct sequence is planning, control, feedback.

Question 10

The costs of providing information to management should be less than the benefits.Which of the following are costs of management accounting information?
i.Salary cost of management accounting personnel
ii.Computer operating costs
iii.Managers' time in reading and acting on the information
A) i,ii and iii
B) ii and iii only
C) i and iii only
D) None of the given answers

Accepted Answer

All three options listed (i, ii, and iii) are costs that are associated with providing management accounting information. The salary cost of management accounting personnel and computer operating costs are obvious costs. Additionally, managers' time spent reading and acting on the information is a cost to the company because that time could be spent on other profit-generating activities.

Question 11

Animus Ltd is a mining company.Which of the following is an example of 'control'?
A) Awarding bonuses to Aimus Ltd's top performing executives
B) Setting production targets for the company's new mines
C) Developing correction actions to respond to lower-than-expected production levels in the existing mines.
D) Pursuing legal actions against environmental activists who stole mining equipment.

Accepted Answer

The answer of Animus Ltd is a mining company.Which of...

Question 12

Which of the following would not be likely as a consistent focus for a firm following a product differentiation strategy?
A) Quality
B) Delivery
C) Product innovation
D) Cost reduction

Accepted Answer

A firm following a product differentiation strategy typically focuses on creating a unique and distinct product that stands out from competitors. Quality, delivery, and product innovation are all important factors in achieving this differentiation. Cost reduction, on the other hand, is more closely associated with a low-cost strategy rather than product differentiation. Therefore, D would not be a likely consistent focus for a firm following a product differentiation strategy.

Question 13

Animus Ltd is a mining company operating in Australia.The company has recently developed a new environmental management accounting system.According to institutional theory:
A) The new system is likely to be the result of the Australian culture of being environmentally conscious and the fact that negative environmental impacts can result in significant fines to the company.
B) The new system is likely to be the result of gaining legitimacy and to imitate other mining companies who are 'doing the right thing'.
C) The new system is likely to be the result of stringent government regulations.
D) The new system is likely to be the result of careful,rational,cost-benefit analysis.

Accepted Answer

Institutional theory suggests that organizations develop certain practices and policies not necessarily because of rational analysis, but rather to gain legitimacy and to imitate other successful organizations in their field. Therefore, it is likely that Animus Ltd developed the new environmental management accounting system to gain legitimacy and to be viewed as a responsible and environmentally conscious mining company, similar to their competitors. While culture, government regulations and cost-benefit analysis may have also played a role in the development of the new system, institutional theory suggests that gaining legitimacy is the most significant factor.

Question 14

Which of the following statement/s is/are false? Management accountants should:
i.help in the provision of physical data to managers
ii.be included in the management of information systems
iii.present their information in monetary terms only
iv.help to ensure effective interdepartmental communications
A) i and ii
B) iii and iv
C) iii
D) iv

Accepted Answer

Statement iii is false as management accountants should present their information not only in monetary terms but also in non-monetary terms, such as physical units or ratios. Statements i, ii, and iv are true as management accountants should provide physical data to managers, be included in the management of information systems, and help ensure effective interdepartmental communications.

Question 15

Animus Ltd is a mining company.Which of the following is an example of a decision relating to formulating Animus Ltd's corporate strategy?
A) Should Animus Ltd operate in the mining industry only,or to expand to heavy machinery manufacturing and distribution?
B) Should Animus Ltd compete based on price or product differentiation?
C) Should Animus Ltd hire a new financial controller?
D) Should Animus Ltd develop a new management accounting system?

Accepted Answer

Formulating corporate strategy involves making decisions related to the scope of the business, including product lines, markets, and industries to operate in. Option A is the only choice related to the expansion of Animus Ltd's business scope. Choices B, C, and D are more tactical and operational decisions that do not address the formulation of corporate strategy.

Question 16

Choose the statement that best completes this sentence: 'Conventional management accounting focuses on …'
A) budgets,financial performance measures and cost control
B) financial performance measures,external reporting and cost elimination
C) non-financial performance measures,external reporting and cost control
D) external reporting,labour-related activity measures and cost elimination

Accepted Answer

Conventional management accounting focuses on budgets, financial performance measures, and cost control. This includes developing and monitoring budgets, measuring financial performance through metrics such as return on investment (ROI), and controlling costs through strategies like inventory management and cost reduction programs.

Question 17

Which of the following statements is correct?
A) A financial controller is only responsible for financial accounting
B) The primary role of the finance function of an organisation is to liaise with banks and financial intuitions to obtain finance to fund operations
C) In some organisations,management accountants are located in factories.
D) Management accountants are responsible for external reporting as well as providing information to internal managers

Accepted Answer

In some organisations, management accountants are located in factories. This is because they may need to work closely with the manufacturing team to understand production costs and identify areas for cost savings. Option A is incorrect as a financial controller is responsible for both financial accounting and management accounting. Option B is incorrect as the primary role of the finance function is to manage the company's financial resources effectively, which includes obtaining finance but is not limited to that. Option D is incorrect as management accountants are primarily responsible for providing information to internal managers, but not external reporting.

Question 18

Animus Ltd is a mining company.Which of the following is an example of a business strategy decision?
A) Should Animus Ltd operate in the mining industry only or to expand to heavy machinery manufacturing and distribution?
B) Should Animus Ltd compete based on price or product differentiation?
C) Should Animus Ltd hire a new financial controller?
D) Should Animus Ltd develop a new management accounting system?

Accepted Answer

The answer of Animus Ltd is a mining company.Which of...

Question 19

Which of the following are ethical standards for management accountants?
i.Competence
ii.Objectivity
iii.Confidentiality
iv.Integrity
A) i,ii,iii and iv
B) ii,iii and iv
C) i,ii and iv
D) i,iii and iv

Accepted Answer

All four options - competence, objectivity, confidentiality, and integrity - are ethical standards that management accountants should follow. Therefore, option A is the best choice.

Question 20

Strategies are:
A) directions that a firm intend to take in the long term
B) describes the way the firm competes
C) the same as objectives and goals
D) independent of the firm's mission statement

Accepted Answer

The answer of Strategies are:
A) directions that a firm intend...

Quiz 1: Management Accounting: Information for Creating Value and Managing Resources

The 'vision' of an organisation:

Eddy Gunn is a management accountant.Which of following is most likely to be Eddy's responsibility?

Which of the following statements is correct?

Which of the following are key influences on management accounting systems? i.Increased globalisation ii.Computerised production systems iii.The number of employees iv.Supply chain management

Which of the following statements is correct?

Animus Ltd is a mining company.Which of the following is an example of 'planning'?

Choose the statement that best completes this sentence: 'All management accounting information …'

The focus of management accounting over time has changed.Which is the correct historical order for the following foci? i.Cost ii.Profitability iii.Resource management iv.Waste reduction

Which of the following is the most logical sequence for a commencing organisation?

The costs of providing information to management should be less than the benefits.Which of the following are costs of management accounting information? i.Salary cost of management accounting personnel ii.Computer operating costs iii.Managers' time in reading and acting on the information

Animus Ltd is a mining company.Which of the following is an example of 'control'?

Which of the following would not be likely as a consistent focus for a firm following a product differentiation strategy?

Animus Ltd is a mining company operating in Australia.The company has recently developed a new environmental management accounting system.According to institutional theory:

Animus Ltd is a mining company.Which of the following is an example of a decision relating to formulating Animus Ltd's corporate strategy?

Choose the statement that best completes this sentence: 'Conventional management accounting focuses on …'

Which of the following statements is correct?

Animus Ltd is a mining company.Which of the following is an example of a business strategy decision?

Which of the following are ethical standards for management accountants? i.Competence ii.Objectivity iii.Confidentiality iv.Integrity

Strategies are: