Chapter 1 accounting for management (f2 acca)

Bộ đề luyện thi môn F2 ACCA Management Accounting Bộ đề luyện thi môn F2 ACCA Management Accounting Bộ đề luyện thi môn F2 ACCA Management Accounting

Chapter 1: Accounting for Management - Exam

Instructions: This exam consists of 35 multiple-choice questions Select the best answer for

each question Time allowed: 60 minutes

1 Part 1: Questions

1 The following statements relate to financial accounting and to management accounting: (i) The main users of financial accounting information are external to the organisation (ii) Management accounting is that part of financial accounting which records the cash received and payments made by an organisation

Which of the above statements are true?

a) Statement (i) only is true

b) Statement (ii) only is true

c) Neither statement is true

d) Both statements are true

2 Data is information that has been processed in such a way as to be meaningful to its re-cipients Is this statement true or false?

a) True

b) False

3 Which of the following are qualities of good information? (Select all that apply)

a) Relevant

b) Costly

c) Complete

d) Accurate

4 The following statement refers to a quality of good information: The cost of producing information should be greater than the value of the benefits of that information to man-agement Is the statement true or false?

a) False

b) True

5 Which of the following would be data rather than information?

a) The increase or decrease in purchases compared with the previous period

b) The average cost per unit of purchases over a period

c) The percentage increase in purchases compared with the previous period

d) Total purchases over a period

6 Financial accounting primarily focuses on:

a) Internal decision-making for managers

b) Reporting to external stakeholders like investors and regulators

c) Forecasting future budgets

d) Cost control within departments

7 Management accounting information is typically:

a) Prepared according to strict legal standards

b) Historical and backward-looking only

c) Tailored for internal use and can be forward-looking

d) Publicly disclosed in annual reports

8 Which of the following is NOT a primary user of management accounting information?

a) Department managers

b) Shareholders

c) Senior executives

d) Production supervisors

9 The acronym ACCURATE in the context of good information stands for qualities includ-ing Accurate, Complete, Cost-beneficial, User-targeted, Relevant, Authoritative, Timely, and Easy to use Is this true?

a) True

b) False

10 Information that is ’authoritative’ means:

a) It is cheap to produce

b) It comes from a reliable source

c) It is always historical data

d) It includes all possible details

11 Which statement best describes the difference between data and information?

a) Data is raw facts; information is data processed for meaning

b) Data is always numerical; information is textual

c) Information is free; data costs money to collect

d) Data is for external use; information is internal

12 An example of management accounting activity is:

a) Preparing tax returns

b) Auditing financial statements

c) Budgeting for the next fiscal year

d) Issuing shares to the public

13 Good information should be ’timely,’ meaning:

a) It is available when needed for decision-making

b) It covers a long historical period

c) It is expensive to obtain

d) It is presented in complex formats

14 Which of the following is a characteristic of financial accounting?

a) Flexible reporting formats

b) Mandatory compliance with standards like GAAP or IFRS

c) Focus on non-financial metrics

d) Used mainly for performance evaluation

15 Management accounting helps in:

a) Planning, controlling, and decision-making

b) Only recording transactions

c) External audits

d) Legal compliance reporting

16 The cost-benefit principle for information means:

a) Benefits should exceed costs

b) Costs should always be minimized to zero

c) Information should be free

d) Benefits are irrelevant if information is accurate

17 Which is an example of information rather than data?

a) List of daily sales figures

b) Total sales for the month

c) Trend analysis showing sales growth percentage d) Individual customer names

18 Sources of data for management accounting can include:

a) Internal records only

b) External market reports and internal records c) Only government publications

d) Competitor financial statements exclusively

19 ’Relevant’ information is:

a) Useful for the decision at hand

b) Always the most detailed

c) Historical only

d) Costly to produce

20 True or False: Management accounting reports are usually prepared on a monthly or quar-terly basis for internal use

a) True

b) False

21 Which quality ensures information is not missing key elements?

a) Accurate

b) Complete

c) Timely

d) Easy to use

22 Financial accounting is regulated by:

a) Internal company policies only

b) External bodies like FASB or IASB

c) Management preferences

d) Customer feedback

23 An example of data is:

a) Variance analysis report

b) Raw temperature readings from a sensor

c) Break-even point calculation

d) Profit margin percentage

24 Management accounting can include non-financial information such as:

a) Employee satisfaction surveys

b) Stock market prices

c) Tax rates

d) Annual dividends

25 ’Easy to use’ information means:

a) It is presented in a user-friendly format

b) It requires advanced software

c) It is overly simplified

d) It ignores details

26 Which statement is false about management accounting?

a) It is optional for companies

b) It supports strategic planning

c) It must follow external standards

d) It aids in cost management

27 Good information should be ’user-targeted,’ meaning:

a) Tailored to the needs of specific users

b) Available to everyone

c) Focused on costs only

d) Generic and broad

28 True or False: Financial accounting information is always audited

a) True

b) False

29 Which of the following best describes ’processed data’?

a) Raw facts

b) Information

c) External reports

d) Legal documents

30 Management accountants often use tools like:

a) Balance sheets for external reporting

b) Cost-volume-profit analysis

c) Tax forms

d) Shareholder letters

31 ’Accurate’ information must be:

a) Free from material errors

b) Always estimated

c) Based on opinions

d) Incomplete but timely

32 Which is NOT a quality of good information?

a) Relevant

b) Redundant

c) Authoritative

d) Complete

33 An internal user of accounting information might be:

a) A bank lender

b) A supplier

c) A department head

d) A government regulator

34 True or False: Data can become information through analysis and interpretation

a) True

b) False

35 The primary objective of management accounting is to:

a) Satisfy external reporting requirements

b) Provide information for internal decision-making c) Ensure tax compliance

d) Attract investors

2 Part 2: Answers with Detailed Explanations

1 Statement (i) only is true

Explanation: Financial accounting is designed for external users such as investors,

cred-itors, and regulators Management accounting, however, is a distinct discipline focused

on internal decision-making, not limited to recording cash transactions, which is more aligned with bookkeeping Thus, statement (ii) is false

2 False

Explanation: The statement describes information, not data Data consists of raw,

unpro-cessed facts, while information is data that has been prounpro-cessed to be meaningful to its recipients

3 Relevant, Complete, Accurate

Explanation: Good information must be relevant (useful for decisions), complete (not

missing key parts), and accurate (free from errors) ’Costly’ is not a quality; information should be cost-beneficial, meaning its benefits outweigh its costs

4 False

Explanation: The cost-benefit principle states that the benefits of information should

exceed its production costs If costs are greater than benefits, producing the information

is not justified

5 Total purchases over a period

Explanation: This is raw data (unprocessed figures) The other options involve analysis

or calculations, such as comparisons or averages, which qualify them as information

6 Reporting to external stakeholders like investors and regulators

Explanation: Financial accounting focuses on providing standardized financial reports

for external parties to assess the organization’s financial health

7 Tailored for internal use and can be forward-looking

Explanation: Management accounting is flexible, designed for internal users, and often

includes forecasts and planning, unlike the rigid, historical focus of financial accounting

8 Shareholders

Explanation: Shareholders are external users who rely on financial accounting reports.

Management accounting serves internal users like managers and executives

9 True

Explanation: The ACCURATE acronym represents key qualities of good information:

Accurate, Complete, Cost-beneficial, User-targeted, Relevant, Authoritative, Timely, and Easy to use

10 It comes from a reliable source

Explanation: Authoritative information is trustworthy and credible, originating from

re-liable sources

11 Data is raw facts; information is data processed for meaning

Explanation: This is the fundamental difference: data is unprocessed, while information

provides context and meaning through analysis

12 Budgeting for the next fiscal year

Explanation: Budgeting is a key management accounting activity focused on internal

planning and control

13 It is available when needed for decision-making

Explanation: Timeliness ensures information is available when required to support

ef-fective decisions, avoiding reliance on outdated data

14 Mandatory compliance with standards like GAAP or IFRS

Explanation: Financial accounting must adhere to external standards to ensure

consis-tency and comparability

15 Planning, controlling, and decision-making

Explanation: These are the core functions of management accounting, supporting

inter-nal management processes

16 Benefits should exceed costs

Explanation: The cost-benefit principle ensures that the value derived from information

justifies its production costs

17 Trend analysis showing sales growth percentage

Explanation: This involves processing raw data into meaningful insights, making it

in-formation rather than raw data

18 External market reports and internal records

Explanation: Management accounting uses both internal data (e.g., sales records) and

external data (e.g., market trends) to inform decisions

19 Useful for the decision at hand

Explanation: Relevant information is directly applicable to the specific decision, filtering

out irrelevant details

20 True

Explanation: Management accounting reports are typically prepared frequently (monthly

or quarterly) for internal use, unlike annual financial reports

21 Complete

Explanation: Completeness ensures information includes all necessary elements to avoid

misleading decisions

22 External bodies like FASB or IASB

Explanation: Financial accounting is governed by external standards-setting bodies to

ensure uniformity

23 Raw temperature readings from a sensor

Explanation: This is unprocessed data; the other options involve analysis or calculations,

making them information

24 Employee satisfaction surveys

Explanation: Management accounting includes non-financial metrics like employee

sat-isfaction to assess organizational performance

25 It is presented in a user-friendly format

Explanation: Easy-to-use information is formatted to facilitate quick understanding by

users

26 It must follow external standards

Explanation: Management accounting is internal and not subject to external standards,

unlike financial accounting

27 Tailored to the needs of specific users

Explanation: User-targeted information is customized to meet the specific needs of its

intended audience

28 False

Explanation: Not all financial accounting information is audited; audits are typically

required for public companies or specific regulatory purposes

29 Information

Explanation: Processed data becomes information through analysis and interpretation.

30 Cost-volume-profit analysis

Explanation: This is a management accounting tool used to analyze the relationship

be-tween costs, volume, and profits

31 Free from material errors

Explanation: Accuracy ensures information is reliable and free from significant errors.

32 Redundant

Explanation: Redundancy is not a desirable quality, as it wastes resources and adds no

value

33 A department head

Explanation: Department heads are internal users who rely on management accounting

for decision-making

34 True

Explanation: Data becomes information when it is analyzed and interpreted to provide

meaning

35 Provide information for internal decision-making

Explanation: The primary goal of management accounting is to support internal

plan-ning, control, and decision-making