MA1-Chapter Test 1

A policies and procedures manual should result in staff using the same approach to work tasks. This increases __________________.

• accuracy

• consistency

• efficiency

• capacity

The __________ in an organisation is defined as a centre for information and administration.

• manager

• manual book

• office

• computer

What is the primary purpose of an organisation chart?

• To provide customers with the contact details of key personnel

• To ensure employees know to whom they report to

• To show authority and communication lines

• To encourage teamwork between departments

What is an advantage of a decentralised administration function?

• Local offices will have greater control over their administration

• A consistent approach to administration is likely to be followed across local offices

• Duplication of administrative tasks will be avoided

• The overall administration cost is likely to be higher

Two statements relating to organisational policies and procedures are shown below.

1. 1. A documented procedure provides a guide to be followed in a given set of circumstances.

2. 2. A documented procedure usually contains more detail than a policy.

3. Is each statement true or false?

• Statement 1 is true, Statement 2 is false

• Both statements are true

• Statement 1 is false, Statement 2 is true

• Both statements are false

Materials purchased on credit are now returned to the original supplier.

What double entry would be made to account for this return?

• Debit: Materials control

  Credit: Payables

• Debit: Materials control

  Credit: Bank

• Debit: Payables

  Credit: Materials control

• Debit: Bank

  Credit: Materials control

A feature of a computerised accounting system is that it enforces controls on accounting entries and recording.

What is the impact of this feature?

• Accountants are no longer necessary.

• It enables communication with different business systems.

• It reduces the risk of errors and fraud.

• It saves system implementation costs.

Which statement 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

 Which statement describes an advantage of a centralised administration function at the head office?

• Local managers at remote locations have greater control

• Reduced likelihood of duplicated information

• Reduced impact of an information system failure

• Greater flexibility when dealing with local variations

Which term describes a sequence of steps for completing a specific activity?

• Sequential best practice

• A policy

• A procedure

• An organisational hierarchy