Module 1

Question 1

What does accounting involve?

Answer 1

Recording and provision of information

Question 2

What is management accounting?

Answer 2

Concerned with the provision of information to managers

Question 3

What are the 4 vital management functions?

Answer 3

Planning
Controlling
Decision-making
Performance Evaluation

Question 4

What are the features of planning?

Answer 4

Company targets and goals feed into plans

Must be quantified into budgets

Question 5

What do Budgets show?

Answer 5

Expected revenues and costs for suture periods

Question 6

What is control process?

Answer 6

Involves using plans to guide behaviour by comparing planned results to actual
Identify variances and investigate

Question 7

Features of Management accounting?

Answer 7

Can chose any techniques
Not regulated
Any format
Should include categorisation of income and expenditure, actual and budgeted
Depends on nature of industry and company

Question 8

What are the limitations of Management Accounting?

Answer 8

Other factors can significantly affect a decision e.g. legal, environmental, technological

Question 9

7 Key features of Management accounts?

Answer 9

Provides info internally
Help to plan, control, evaluate and make decisions
No legal requirement
Format chosen
As much detail as required
Incorporate non-monetary
Can show historical record and used as future planning

Question 10

7 Key features of Financial accounts?

Answer 10

Provides info externally
Used to assess company as a worthwhile investment
Law requires limited companies to prepare
Format determined by law and regs
Concentrate on business as a whole
Mostly monetary
Historical picture of past operations