MA1 - Chapter 1

Match the following:

• …paying suppliers' invoices

• The finance function is responsible for…

• …hiring new staff

• One of the key responsibilities of the purchasing department is…

• …making sure that only the required good

• Human resources is responsible for…

• …finding new customers

• One of the main responsibilities of the sales function is…

Which one of the following is the correct sequential flow of documents to complete the purchase of goods on credit?

• Goods received note, purchase order, cheque requisition, invoice, delivery note

• Purchase order, delivery note, goods received note, invoice, cheque requisition

• Purchase order, goods received note, delivery note, cheque requisition, invoice

• Purchase order, invoice, goods received note, cheque requisition, delivery note

Which member of staff is most likely to raise a goods received note?

• Delivery driver

• Finance director

• Sales ledger clerk

• Store clerk

Which of the following definitions best describes ‘information’?

• Data that consists of facts and statistics before they have been processed.

• Data that consists of numbers, letters, symbols, events and transactions which have been recorded but not yet processed into a form that is suitable for making decisions.

• Facts that have been summarised but not yet processed into a form that is suitable for making decisions.

• Data that has been processed in such a way that it has a meaning to the person who receives it, who may then use it to improve the quality of decision making.

Which one of the following statements BEST describes why a business organisation must maintain effective control over transactions?

• To ensure that the policy and procedures manual is being followed

• To ensure that formal communication flows are adhered to

• To prevent overpayment to employees

• To maintain control over income and expenditure

Answer explanation

Following the policy and procedures manual and ensuring that formal lines of communication are adhered to may help maintain control over transactions, but the main reason why a business organisation must maintain effective control over transactions is to control income and expenditure.

Overpayment to employees may be a consequence of inadequate control, but this is a very narrow reason that does not BEST describe why control over transactions is required.

Which of the following definitions best describes ‘information’?

• Data that consists of facts and statistics before they have been processed.

• Data that consists of numbers, letters, symbols, events and transactions which have been recorded but not yet processed into a form that is suitable for making decisions.

• Facts that have been summarised but not yet processed into a form that is suitable

  for making decisions.

• Data that has been processed in such a way that it has a meaning to the person who receives it, who may then use it to improve the quality of decision making.

Which of the following is not a purpose of management information in a company?

• To provide records of current and actual performance

• To compare actual performance with planned performance

• To help management with decision making

• To inform customers about the company’s products

Which of the following are all qualities of good management information?

• Digital, brief, relevant

• Reliable, consistent, timely

• Secure, accurate, printed

• Accessible, universal, complete

Which of the following statements is incorrect?

• Management accounting reports are more accurate than financial accounting statements.

• Management accounting reports are more detailed than financial accounting statements.

• Management accounting reports are more frequent than financial accounting statements.

• Management accounting reports are not disclosed to shareholders and investors.

Which one of the following statements is correct?

• Data is held on computer in digital form whereas information is in a form that is readable to human beings.

• Information is obtained by processing data.

• Data and information mean the same thing.

• Data consists of numerical or statistical items of information.