Chapter 1

Question 1

What is the difference between Financial and Management Accounting

Answer 1

Financial Accounting -
Required by law
Accurate
Figures show what happened in the past
Must be produced annually
Prepared for many different stakeholders, EXTERNAL

Management Accounting -
Optional to do
Information may be approximate
No prescribed rules
Can be for past present or future
Produced when required
Prepared for management - INTERNAL

Question 2

What is planning for businesses

Answer 2

where the business would like to be, at some future point, often by setting objectives or
targets. Financial targets are known as budgets

Question 3

What is Strategic planning

Answer 3

process of deciding on long-term objectives of the organization and on the resources used to
attain these objectives

Question 4

What is Tactical Planning

Answer 4

medium-term process by which managers fulfil the objectives of obtaining and using resources
effectively and efficiently in the accomplishment of the organisation’s objectives.

Question 5

What is Operational planning

Answer 5

The short-term process of assuring that specific tasks are carried out effectively and efficiently, and
short-term targets necessary to manage the business on a day to day basis are achieved

Question 6

what is Decision-making

Answer 6

Making decisions to get the business from where it is now, to where it wants to be i.e. deciding how to
achieve the plan. Decisions on products and markets are important here.

Question 7

What is Control

Answer 7

Ensuring the decisions are implemented correctly and that the plans are actually fulfilled.

Question 8

What is Data

Answer 8

Data is the raw unprocessed figures that have been collected about an activity or procedure e.g. the
number of units made each day.

Question 9

What is numerical / quantitative data

Answer 9

data can be measured ex: no of siblings

Question 10

Categorical data

Answer 10

can be sorted into non-overlapping groups. It too can be further broken down
into two types – ordinal and nominal

Question 11

What is Nominal Data

Answer 11

data does not have any numeric value or natural order (colours of eyes, brands of cars,
place of birth).

Question 12

What is Ordinal Data

Answer 12

data has a set order or scale to it. For example income levels, ratings for a restaurant on
a scale from 0 (lowest) to 10 (highest), time of day (dawn, morning, noon, afternoon, evening,
night).

Question 13

What is Quantitative Data

Answer 13

can be measured (how old are you?)

Question 14

What is Qualitative data

Answer 14

data that can’t be
measured (how blue are your eyes?).

Question 15

What is Primary Data?

Answer 15

data has been gathered for the specific purpose by yourself (interviews, questionnaires
etc.).

Question 16

What is Secondary Data

Answer 16

data has been gathered by someone else for another purpose that you use for
your purpose. Examples include financial statements used to base a share investment decision
on or government inflation statistics used to decide on product price rises.

Question 17

What is Information?

Answer 17

is processed data that is in a form that makes it valuable to the user e.g. the percentage
increase in daily production

Question 18

What Are the qualities of Good information?

Answer 18

Accurate - Precise enough
Complete
Clear
User friendly
Reliable
Accessible
Timly
Effective

Question 19

What are the main Sources of Data?

Answer 19

Machines, Transactional & human

Question 20

What is Big Data

Answer 20

Big data includes data collected from many, previously separate, systems.

Question 21

what is structured data?

Answer 21

is the easiest to search and organise, because it is usually contained in rows
and columns and its elements can be mapped into fixed pre-defined fields. Examples include
accounting transactions and star ratings by customers.

Question 22

What is Un-Structured data

Answer 22

cannot be contained in a rows-and-columns database. Examples include
video and audio files and social media posts. The lack of structure means it is more difficult to
search, manage and organise.

Question 23

What is Semi Structured data

Answer 23

is a mix of structured and unstructured data. It has some defining or
consistent characteristics but doesn’t conform to a rigid structure. Email messages are a good
example – the actual content is unstructured but a message does contain structured data such
as the name and email address of the sender and recipient, the time sent and so on.

Question 24

What are the 5 Characteristics of big data

Answer 24

Volume, Velocity, Variety, Veracity, Value