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Theory of IT and Management

Management information Data Information Purpose of management information Planning Control (feedback and feed forward control) Decision-making. Features of useful information Reliable, Timely, Relevant, Complete, Accurate, Clear, Cost effective Management accounts Distributed internally Concerned with past and future Used for planning control and decision making Includes of financial and non-financial information Financial accounts Used for external reporting Legal requirement for limited companies Concerned with past data Usually includes of financial information Reporting management information Ad hoc reporting, Regular reporting Types of communication Written communication Letters Memo Reports Email Fax Oral communication Face to face meeting Telecommunication Video conferencing Responsibility accounting Cost centre, Revenue centre, Profit centre, Investment centre Miscellaneous terms Archiving Active files Non-active files Backup Types of processing Batch processing Online Processing Centralisation Decentralisation Policy manual Bespoke software Off the shelf packages Virus Terminals (dumb and intelligent) GUI (Graphical User Interface) Different types of Checks Format check Range check Limit check Check digit verification Prepared by: Zaira Anees Page 1

Practice questions
1. Which one of the following is controllable by the head of production department? A. Price paid for material B. Raw material used C. Electricity bill rates D. Wages paid to labour 2. Which one of the following is a best password? A. Robertson B. oct2008 C. ZQ56 D. ZA5209A6 3. Which one of the following are incorrect regarding backup? i) Backup should be checked and updated on a regular basis ii) Company should make backup of non-active files iii) Backup should be made on the same PC iv) Grand-Father-Son is a concept used in backup A. i) and iv) only B. ii) and iii) only C. i) and iii) only D. ii) and iv) only 4. You should except my offer Above statement contain a mistake and the sentence should be like this You should accept my offer How will you correct this mistake in a word document? A. Spell checker C. Grammar checker B. Proof reading D. Computer will automatically correct it 5. ACCA database holds information of students E-mail addresses is among one of them. E-mail is an example of A. File B. Record C. Field D. Database 6. A company wants to compare its own companys sales and its major competitors sales over a period of 5 years. Which chart most suits this requirement? A. Pie chart C. Multi bar chart B. Simple bar chart D. Component bar chart 7. Assume that it is 9:00 am of 30th Nov and you have to call an urgent meeting on 31st Nov at 10:00 am. How will you inform the members of meeting? A. Call C. E-mail B. FAX D. Courier 8. Assume that it is 20th Dec; you want to tell your staff that the factory will remain close in last three days of Dec. Which one of the following is the best method of communication? A. Notice board C. E-mail B. FAX D. Personal meeting 9. A company is facing seasonal variation in sales, where last quarter and first quarter (Q1 and Q4) peak seasons and Q2 and Q3 are are down seasons. How you will compare performance of sales in Q4? i) Budgeted sales and actual sales of Q4 ii) Sales of last years Q4 with sales of current years Q4 iii) Actual sales of current years sales of Q3 with sales of current years Q4 iv) Actual sales of Q1 with Q4 Which statement is correct? A. i) and ii) only C. iii) and iv) only B. ii) and iii) only D. i) and iv) only 10. What you will write at the end of the official letter? A. Yours truly C. Yours sincerely Prepared by: Zaira Anees Page 2

B. Yours faithfully

D. Yours obediently

11. Which of the following statement is incorrect? i) In perpetual inventory system, stocks are updated on a regular basis after every transaction. ii) Bin card records only date, quantity and code of material iii) Purchases department prepares material purchase requisition A. i) and iii) only C. ii) and iii) only B. i) only D. iii) only 12. Which of the following are incorrect about Data Protection Act? i) Data should be kept ii) Data should not be passed to third party iii) Data should be fairly obtained and shall be used for lawful purpose iv) It should always be kept up to date A. i) and iii) only C. ii) and iii) only B. i), iii) and iv) only D. ii) only 13. Which of the following statements are correct? i) Company archive different files because it is not used in future ii) Company archive different files in order to create capacity iii) Company archive different files but they are also remained in the system A. i) and iii) only C. ii) only B. iii) only D. i) only 14. Performance Measurement of cost center can be i) analysed by comparing cost of current year with cost of last year ii) analysed by comparing profit of current year and last year iii) analysed by comparing CPU of current year with cost per unit of last year A. i) and iii) only C. ii) and iii) only B. ii) only D. iii) only 15. the most common cause of incorrect data is A. Virus C. Hacking B. Hardware failure D. Human error 16. Quality of good information A. Timely, reliable and presented manually B. Complete, accurate and as much detailed as possible C. Clear, reliable and relevant for purpose D. Reliable, accurate and presented in graphs 17. Which one of the following is true? A. X-axis is always dependent and Y independent B. Y-axis is always dependent and X independent C. No matter D. None of above 18. There are different checks which organisation uses to ensure safe and correct input of data. A check which ensures that customers account number has been entered correctly or not is called A. Range check C. Format check B. Feasibility check D. Check digit verification 19. Which one of the following is/are not example of data? i) Collection of customers detail ii) Report showing amount of sales in each region iii) Bad debt analysis iv) Variance report A. i) and iii) only B. i) only C. ii), iii) and iv) only D. i) and ii) only Prepared by: Zaira Anees Page 3

20. Which of the following are not examples of physical access control? Security guard Encryption Card entry system Firewall Close circuit cameras A. i), ii) and v) only B. ii) and iv) only C. i), iii) and iv) only D. ii), iii) and iv) only 21. Under health and safety legislation, which one of the following are duties of employee? i) Follow guidelines ii) Co-operate with employer iii) Use all equipments iv) Inform employer about any danger A. i), ii) and iv) only B. All of above C. None of above D. iii) only 22. Which of the following is example of external information? i) Consumer price index statistics ii) Variance report iii) Income tax rate iv) Product cost A. i) and iii) only C. i), iii) and iv) only B. ii) and iv) only D. iv) only

23. Which one of the following is not a disadvantage of integrated system? i. Data used to be input only one time ii. All users can access same data iii. Same information cannot be available for all iv. All department have same layout v. No need of labour training A. ii, iii and v only C. iii and v only B. i, ii and iv only D. iii and iv only

24. Which one of the following is/are feature of physical security? Closed circuit cameras Passwords Audit trails Mechanism to check in and out Encryption Firewall To employ security guard to check identification A. i, iii and vii B. iii, v and vi only C. ii, iii and v only D. i. iv and vii only 25. If information is confidential best should be delivered A. by E-mail C. by telephone B. personal meeting D. FAX 26. User-friendly systems can include a number of features. Which one of the following is not user-friendly? A. GUI B. WIMP C. Icons D. DOS 27. Which of the following is not among one of the health and safety requirements towards employer? i. To provide maintained equipment ii. To give training to labour iii. To provide basic education facility iv. To provide accommodation Prepared by: Zaira Anees

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v. To provide protective clothing, if required A. i. ii and v only C. ii, iv and v only B. iii and iv only D. i. iii and v only

28. If a person is working 8 hours per day on a computer system, which one of the following will be applied? To allow him regular tea breaks To allow him regular but short breaks Provide RSI protected keyboards Adjustable chairs to adjust his height To provide him few but long breaks A. ii, iii and iv only C. i, iii and iv only B. iii, iv and v only D. ii, iv and v only

29. An organization has recently introduced a scanner and OCR software to 'digitize' information received on paper. Which of the following is not a likely benefit of this? A. saving in staff cost B. easier access to information as it is stored in a digital form. C. Quicker input process D. Reduced need to take back up 30. Which one of the following is not a service centre? Refining department Machining department Store department Canteen department Finishing department A. i, ii and v only B. iii and iv only C. iii, iv and v D. all except ii and v 31. Which of the following is relevant in the calculation of prime cost of production? A. Supervisor's salary B. Absorbed production overheads C. Direct expense D. Overtime premium paid due to machine breakdown i. ii. iii. iv. 32. Which of the following is usually a function of the accounts department? payroll preparation negotiating prices and discounts from supplier payments of supplier's invoices preparation of financial statements i. and ii only C. iii and iv only i. iii and iv only D. ii and iii only 33. Data processing can be divided into two main types batch processing and real time processing two statements follows about real time processing 1. real time processing involves transactions being input and processed immediately 2. Travel agents, airlines and cinema and theater tickets agencies would use real time processing.

A. B.

A. B.

Statement 1 is correct only Both statements are correct

Statement 2 is correct only Both statements are incorrect

34. Which one of the following is not management accounting information? A. Sales budget C. Variance report B. Profitability report D. Bank statement 35. A section in a company policy manual contains the terms 'segregation of duties', 'job rotation' and 'need to know'. What policy is this section MOST likely to be describing A. staff recruitment procedure B. staff appraisal and training C. responsibility accounting D. personnel security controls Prepared by: Zaira Anees

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36. What will not be affected by telecommunication? A. office rent B. Phone bill C. Travel time D. Conference time 37. Which of the following about policy manual is true? i. it helps to ensure that all personnel follow procedure ii. it helps to ensure best practices iii. all businesses are required by law to keep policy manuals for all employees A. Statement i. and ii only B. Statement ii, and iii only C. Statement i. and iii only D. All of above 38. Which one of the following is not a function of the purchasing department? A. Ensuring that only required goods are purchased B. Ensuring that suppliers used give that best prices C. Negotiating discounts with suppliers D. Paying supplier's invoices 39. Which one of the following is not considered as an advantage of e-mail? A. secure method of communication B. speedy delivery C. stores messages for a given period after they are received. D. Can make a single message available to many persons 40. Which one of the following statement is incorrect? A Local Area Network (LAN) A. relies on telephone lines to link together B. Is incapable of extensive geographical dispersion C. is likely to contain a central server computer. D. None of above 41. Which one of the following statement is incorrect? A. A help function is often a feature of a user friendly program B. A mouse driven program can use both keyboard and mouse as input devices. C. Function keys on keyboard enables the users to enter instructions quickly to the computer, in order to carry out defined operations with an application programs. D. Icons are normally used on systems that do not need a mouse for computer. 42. A spreadsheet software application may perform all of the following business tasks except one. Which one of the following is the exception? A. The presentation of numerical data in the form of graphics and charts B. The application of logic test to data C. The application of what if scenarios D. Automatic correction of all data entered by the operation into the spreadsheet. 43. Modern offices are often described as processing towards the paperless office. Which of the following technologies is least likely to support this? A. Electronic data change B. Document image processing C. Electronic mail D. the Facsimile (FAX) 44. Hacking is a crime. Which of the following best describe hacking? Changing data on disk c. Unauthorised access to a computer system Passing on a computer virus d. None of above

45. Which of the following best describes a profit centre? A Part of a business where management makes investment decisions B Part of a business that provides a service to other parts of the business C Part of a business where finished products are manufactured D Part of a business where management is responsible for revenues and costs

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46. Spelling and grammar checking is a feature of a word processing package. Which one of the following is not a spelling or grammar checking test? A. checking that all full stops are followed by at least one space. B. Highlighting incorrectly spelt words and suggesting corrections. C. Highlighting very long sentences. D. checking all values in tables add up correctly. 47. Which of the following are reasons to buy an off-the-shelf inventory control software package? (1) The package will require significant tailoring (2) The package is available now and ready for use (3) The package will be available to the organisations competitors (4) The package will have been tested by other users 2 only b) 1 and 3 c) 2 and 4 d) 3 and 4 48. In a large company, which of the following activities may be the responsibility of an accounting technician? A Calculating cost variances B Making capital investment decisions C Approving budgets D Allocating warehouse space 49. What is an interlocking bookkeeping system? A A single, combined system containing both cost accounting and financial accounting records B A system combining cost accounting and management accounting C A system supported by prime entry records D A system where separate accounts are kept for cost accounting and for financial accounting. 50. Computer systems are extremely useful for processing accounting information. Which of the following is not an advantage of computerised accounting system compared to a manual system? A. Its easy to find where mistakes have been made. B. Double entry is automatic. C. Data can be analysed quicker. D. Less training is required to use computer system. 51. Which of the following are characteristics of management accounting information? (i) Non-financial as well as financial (ii) Used by all stakeholders (iii) Concerned with cost control only (iv) Not legally required A (i) and (iv) B (ii) and (iii) C (i), (ii) and (iii) D (ii), (iii) and (iv) 52. Which of the following only contains essential features of useful management information? A Accurate, clear, presented in report format B Timely, reliable, supported by calculations C Regular, complete, communicated in writing D Clear, accurate, relevant for its purpose 53. Which one of the following item of information would be least essential to gather when signing in a visitor? A. The visitors name. B. The person or department being visited. C. Time of arrival and leaving. D. The purpose of the visit. 54. Which of the following statements about cost and management accounting are true? 1. Cost accounting cannot be used to provide inventory valuations for external financial reporting 2. There is a legal requirement to prepare management accounts 3. The format of management accounts may vary from one business to another 4. Management accounting provides information to help management make business decisions A 1 and 2 B 1 and 4 C 2 and 3 D 3 and 4 55. Consider the following statements relating to process costing: Statement 1: Many files combine to make a record. Statement 2: Many fields combine to make a record. Statement 3: Many records combine to make a file. Statement 4: Many records combine to make a database. Which statement(s) is/are false? Prepared by: Zaira Anees Page 7

A 1, 2 and 3 C 2 and 3 only

B 1 and 4 only D 1 and 2 only

56. What is the purpose of management information? A Planning only B Planning and control only C Planning, control and decision-making only D Planning, control, decision-making and research and development 57. The following statements relate to spreadsheets: (i) A spreadsheet is the most suitable software for the storage of large amounts of data. (ii) A spreadsheet consists of rows, columns and cells. (iii) A forecast profit and loss account could be prepared using a spreadsheet. Which of the statements are correct? A (i) and (ii) only B (i) and (iii) only C (ii) and (iii) only D (i), (ii) and (iii) 58. For which of the following would a production line manager of a manufacturing company be responsible? A. Labour rates and raw material prices. B. Labour hours worked and raw material prices. C. Labour rates and raw material usage. D. Labour hours worked and raw material usage. 59. Which three of the following are usually considered to be profit centres? i) A brand ii) A service department in a factory, such as maintenance iii) A machinery in a factory. iv) A division of a company v) A product A. i, iv and v B. i, ii and iii C. ii, iii and iv D. i, ii and v 60. Features of computer systems include: (i) icons (ii) keyboard (iii) optical mark reading (iv) pull-down menu Which of the above are features of graphical user interfaces? A (i) and (iv) B (ii) and (iii) C (i), (iii) and (iv) D (i), (ii) and (iv) 61. Which one of the following is not applications software? A Database software B Word-processing software C Software which gives priority to different programs during processing D Software designed in-house to perform a particular task for a particular user. 62. A smart card is: A A plastic card with machine-sensible data recorded on magnetic stripe B A plastic card with machine-sensible data recorded on a microchip C A credit card with a security hologram D A hand-held device used to scan text

63. The system operated at many businesses whereby a customers bank account is debited with the price of goods purchased at the time of the sale is known as: A EFTPOS C. POS B EPOS D. EFT

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64. Modem is derived from two words. They are: A Modern demographics C. Modulate demodulate B Modular demonstration D. Model manager 65. Which of the following is a device for converting digital signals to analogue signals and then back again? A Transformer C. Modem B Packet Switcher D. Interpreter 66. Which of the following input technologies uses a stylized font in banking applications? OMR C. OCR MICR D. BACS 67. Bits and bytes are terms used to describe the size of computer memory and storage. Which of the following statements is true? A A bit is larger than a byte C. A byte is larger than a bit B A byte is the same size as a bit D. A bit may be larger or smaller than a byte 68. Which of the following is not considered an advantage of E-mail? Secure method of communication Speedy delivery Stores messages for a given period after they are received Can makes a single message available to many persons 69. Which of the following is not a typical function of an operating system? A Booting B Translating a program from one language to another C Managing multi-tasking D File management 70. Which one of the following statements relating to the internet is false? A. Some of the information available on the internet is poor quality B. All business communicate via internet is secured by the standards developed by Electronic Data Interchange (EDI) communication system. C. Some of the information on the internet is high quality D. Many businesses now include a website on the internet as an element in their marketing mix. 71. The screen print below shows the Print options from a Windows application. What does the field description Name have the letter N underlined? A To emphasis the need for the user to check the name of the printer before printing. B To allow the user to select the Name function using the ALT and N keys. C To indicate that the printer name field is mandatory and hence should contain an entry D To indicate that the printer name field has a pull-down list of valid entries. 72. The following formula is contained in a spreadsheet cell B5. =ROUNDUP (B4, 0) If the value in B4 is 2.36, what is the value in B5? A. 3 B. 2.5 2.4 D. 0 73. With reference to the following screen, the user wished to return to the page they viewed before this one. What command would they use? A Back C. Refresh B History D. Search

74. In the following the word Home is underlined (shown at the end of the large arrow.) Why is the word Home underlined? A To indicate how important the Home page is to the user B To allow the user to select the Home function using the ALT and H keys Prepared by: Zaira Anees Page 9

C D

To allow the user to select this option through the Home page key on the keyboard To indicate that it is a hypertext link to the Home page of the Internet site

75. Which of the following is responsible for the implementation of the Data Protection Act? A Comptroller & Auditor General C. Audit commission B Data Protection Registrar D. Department of Trade & Industry 76. The consequences of the activities of hackers can be very serious for an organisation. One from the list below is not a risk associated with hacking. Which one is it? A Generate information which is of potential use to a computer B Provide the basis for fraudulent activity C Alter or delete the files D Steal computer hardware 77. An organisation has a large customer data file stored on its computer system. The size of this file is one of the factors causing the computer systems in the organisation to perform inefficiently. A consultant has pointed out that almost half of the customers on the file have not ordered for five years and suggests that information about such customers should be moved to magnetic tapes for ling-term storage. Which of the following is this an example of: A Backing-up C. Archiving B Dumping D. Defragmenting 78. Why should some computer back-ups be stored off-site? A To save office space B To enable working at home C To conform with the procedures manual D To ensure a back-up is available should the office be damaged or destroyed 79. Which one of the following security options is unlikely to be feasible for most businesses? A Iris scanning C. After hours security guard B Swipe card access D. Door access combination code 80. Which of the statements about password is true? A If you have a password you know you wont forget, you should never change it B You should change your password everyday C Your password should be easy for you to remember, but difficult for anyone else to guess D You should make a note of your password and keep this in your desk drawer 81. The most common cause of incorrect data in computer system is: A Hacking C. Viruses B Hardware failure D. Human error 82. What is relationship between z data and information? A Processed data is called information B Data are raw materials for data processing C Data are facts and figures are not apparently meaningful D All of the above 83. Comparison between actual and budgeted costs will help the management in which of the following areas? Control C. Planning Implementing D. Decision making 84. Management compares the planned performance with the actual one in order to determine cause of deviation and to take corrective measure. The above-mentioned function of management is called? A Checking plan B Variance analysis and control C Comparison measure D None of the above 85. Which of the following would be data rather than information? A Increase/Decrease per product in the sales in last quarter Prepared by: Zaira Anees Page 10

A B

B C D

Total sales value per product Salesmans commission as a percentage of total sales Sales made per salesman as a percentage of total sales

86. Which of the following about management information is false? (i) It includes both financial and non-financial reporting (ii) It is used for both internal and external reporting (iii) It considers only the past data Statements (I) and (iii) only Statement (ii) and (iii) only Statement 2 only All 3 statements are false 87. The coding of a product is done in the following format: Product/type of expense/department The following info is given: Wages 012 Salaries 013 Product A 514 Product B 513 Dept. C 214 Dept. D 213 How will the wages relating to product A an in department C be coded? A. 012-514-214 B. 514-012-214 C. 214-514-012 D. 514-214-012 88. Which of the following about management information is false? A. Prices changes should be considered while working on management information B. Information should not have any accountancy jargon C. Information should be reliable, timely and accurate D. The costs of producing the information should be greater than the benefits 89. Which of the following is NOT a purpose of management info in a company? A To provide records of current and actual performance B To compare actual performance with planned performance C To help management with decision making D To inform customers about the companys products 90. Which of the following is always a quality of good information? A Immediate availability C. Availability to everyone B Reliable D. Technically accurate A B C D 91. 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 92. Which of the following are ALL qualities of good management information? A Digital, brief, relevant C. Reliable, consistent, timely B Secure, accurate, printed D. Accessible, universal, complete 93. Which of the following statements is correct? A Data is held on computer in digital form whereas information is in a form that is readable to human beings B Information is obtained by processing data C Data and information mean exactly the same thing D Data consists of numerical items only

94. Which of the following is true about ad-hoc reports? Prepared by: Zaira Anees Page 11

A B C D

(i) An ad hoc report is generated only once or occasionally (ii) An ad hoc report has a house style (iii) The format and contents of an ad hoc report vary according to requirements Statement 1 only Statements 1 and 3 only statements 2 and 3 only all the statements are correct 95. How does information differs from data? A Information is quantitative but data is qualitative B Data is information in a meaningful context C Data is quantitative but information is qualitative D Information is data in a meaningful context

Check whether TRUE or FALSE


1. 2. 3. 1 byte is equals to 8 bits Financial accountant decides what product to continue and what to stop. An ad hoc report must follow standard format icon is used to align text from left

4. 5.

6. system failure 7. Grandfather, father, son is a concept used in archiving. 8. Tax rates are announced by tax authorities and are example of external information 9. An exception reporting means Report only those variances that exceeds acceptable limits 10. If selling price variance is favourable then this means actual selling price is less than standard. 11. 1024 bytes is equal to one kilobyte 12. 1024 GB is equal to one MB 13. One of the benefits of using client server system is to share different information without going to other persons desk 14. Intranet is same as internet 15. Shared data, shared peripherals and quick way of communication all are the advantage of client server system. 16. Advantage of client server system also includes accurate and secure data.

I has been underlined so as to tell user which key he should be used with Alt. Tape streamers are only used to back-up all the files on a computer system in case of a

17.

GUI stands for Graphical User Interface and it is the way of communicating data by using different commands 18. By using user friendly software, company can reduce training cost. 19. Monitor (or VDUs) can be used as input and output device 20. Management information accounting information consists of financial information but financial accounting information consists of financial and non financial information both. 21. Management accounting information is legally requirement. 22. Scanner is one of the output devices. 23. One of the risks of using email is that it is not a secure way of communication.

24.
25. 26. 27. 28. 29. 30. 31. 32. 33. Prepared by: Zaira Anees

In context of email, bcc stands for bold carbon copy http stands for hyper text transfer protocol =add(A1:A5) will add automatically cells from A1 to A5 Bit is greater than byte CD and DVD both are examples of permanent storage. Spreadsheets allow user to draw different graphs. Apportionment means distribution of costs over two or more cost centres. mega byte is less than kilobyte case sensitive passwords can be used to make a simple password difficult to guess Management should take actions against those variances which are adverse. Page 12

34. Information related to sales volume is considered as external information for production 1. department at the time of budgeting. 35. Archiving is a copy of computer file kept separately from main system in order to be used if original file get corrupted 36. Mnemonic related to quality of good information is accurate 37. Mnemonic accurate stands for accurate, complete, cost beneficial , User targeted, relevant, authoritative, timely, easy to use 38. The difference between letter and memo is that letter is formal and memo is informal 39. Within the context of data protection act, data users are individuals or organization which uses the data. 40. Bar charts are usually used to show trends 41. policy manual can include policies relates to purchase of material and choosing suppliers 42. If management has to choose between different alternatives, then this will be an example of decision making. 43. If material cost variance is adverse then it might be because of use of low graded labour. 44. Policy manual can also include policies related the verification process of customer. 45. If different files have been integrated then this means that changing telephone number of supplier at one place will automatically change telephone number in other files. 46. Performance of investment centre can be measured by ROCE and RI. 47. Performance of cost centre can be measured by comparing actual cost per unit of current year with budgeted cost per unit of last year 48. Fixed cost and semi variable cost per unit increases when production volume decreases. 49. Financial accounts are legally required but management accounts are not. 50. Management accounts are related with past as well as future. 51. Ad- hoc reports are regular reports issued by management. 52. Letter, e-mail, video conferencing all are examples of written communication. 53. One of the limitations of management accounting is that it is financial as well as nonfinancial. 54. Archiving is used to free up storage space. 55. Company make backup to retain that data which is required to fulfill legal obligations. 56. A cost book keeping system in which cost accounting transactions and financial accounting transactions are recorded is known as integrated system. 57. Management information helps management in planning, controlling and decision making. 58. Routine information is useful for long term decisions. 59. Management accounting reports are more detailed as compared with financial reports. 60. Current bank balances and supplier statements are kept by management accountant. 61. Complexity of information is not a part of useful information. 62. Bank interest rate, loan repayment schedule and dividend all are included in cost accounting. 63. Generally dispatch of customer orders is the responsibility of accounts department. 64. Report showing variances and its analysis is an example of information. 65. Management accounting information is provided throughout the year, whereas financial reporting is only at specific times of year. 66. Management accounting information is for external stakeholders and financial accounting information is for internal stakeholders. 67. Total number of employees is example of data and detail of employees about their classification and department to which they relate is an example of information. 68. Decision whether to diversify or not is an example of strategic decision making. 69. Decision whether to allow labour for overtime or not will be an example of tactical decision making. 70. Credit ratings issued by different credit rating agencies are an example of secondary data. 71. Managers should only be responsible for controllable costs in their decisions. 72. Encryption is the process used to protect data while transmission through email. 73. Passwords are used to protect data from unauthorised access. 74. Different products, brands and divisions can be example of profit centers. 75. If labour cost variance is favourable then it might be because of use of experienced labour. 76. If material cost variance is adverse then it might be because of purchase of low price material. 77. Production department, store and maintenance all are examples of investment centers. Prepared by: Zaira Anees Page 13

A manager is responsible for costs and revenue for his part of the business. He is also responsible for the type of machines which should be bought and used in his factory. He is manager of investment centre. 79. Reserve inventory means finished inventory that has been reserved for specific customer and will not be dispatched to anyone other than that customer. 80. Only active files are archived. 81. Backup is a procedure used to keep data up to date. 82. Letter is used for internal communication and memo (or memorandum) is used for external communication. 83. E-mail is faster and most secure method of communication. 84. Total cost when divided with total number of units will give cost per unit. 85. Performance can also be measured by comparing actual information of current year with similar company of same industry 86. flexible budget allow to calculate cost at different activity levels 87. B1-B50 in spreadsheet represents column 88. A1-K1 represents row in spreadsheet. 89. Asset turnover ratio is calculated by dividing profit with capital employed. 90. Case sensitive password is the use of capital and small letters to make password more difficult to guess. 91. Data used in word processing software comprises of text, numbers and formulae. 92. Personal data shall be accurate and shall be updated every year 93. Information on timesheets used for making up wages is an example of primary data 94. Managers are responsible for controllable as well as uncontrollable variances. 95. Information from trade publication used to choose a supplier of raw material is an example of secondary data 96. Accounts department should pay for invoices after matching it with delivery note and invoice. 97. If labour cost variance is adverse then it might be because of use of cheap quality of material. 98. Recruitment and induction of new staff should be done by personnel department 99. A document issued by purchasing department, sent to the supplier requesting material is called purchase requisition 100. Performance of cost centre can be measured by gross profit %. 101. A store ledger account shows only the quantity of stock held 102. A document received together with materials and matched with purchase order at the time of payment is called invoice. 103. A document prepared by store department on receipt of raw material, sent to the purchasing department to confirm delivery is material requisition note 104. values on X axis are dependant on values shown on Y axis 105. A document issued by production department and sent to the stores department requesting materials is called material purchase requisition 106. Back up can be used to aid management in case information in original system gets lost. 107. Performance of profit centre can be measured by operating profit%. 108. Backup should be made on the same PC 109. Company archive different files but they are also remained in the system. 110. Performance Measurement of cost center can be analysed by comparing cost of current year with cost of last year 111. Information on from a government publication concerning forecast rated used for budgeting is an example of primary data 112. under data protection act, an employee is allowed to access to all of his personal data held by an employer 113. Under data protection act, an employee can sue an employer for distress caused due to his personal data being factually incorrect. 114. Management carryout variance analysis at the end of the year. This is an example of decision making 115. feedforward control takes place before a variance is reported 116. Management makes budget at the starting of the year. This is an example of planning. 117. Performance of cost centre can be measured by cost per unit 118. Performance of investment centre can be measured by comparing ROCE of current year with ROCE of last year 119. if selling price increase then contribution will decrease 120. Financial accounting is concerned with future results as well as historical information Prepared by: Zaira Anees Page 14

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121. If management of a company wants to send information to head office overseas then it should e-mail it
122. 123. 124. 125. 126. 127. rather than sending it via courier. A bin card shows the quantity and value of stock held if fixed cost will increases then breakeven point will decrease if fixed cost decreases then margin of safety will increase If information is confidential, then you must not discuss its contents with anyone. DOS means disk operating system and it controls basic computer operations. Personal data shall be obtained only for specified and lawful purpose and Graphs and diagrams are a better way of communication then report containing paragraphs of information representing same thing Information should be relevant to the purpose and should not be excessive from its purpose. values on Y axis are dependant on values shown on X axis RAM stands for random access memory which is of volatile nature and anyone switches off computer then it will be lost. Reporting by exception means that reporting of only those variances which exceed a predefined limit. if variable cost decreases then breakeven point will also decrease Allocation means assign a whole item of costs to a centre account. Absorption of overheads means process by which overheads are included in the costs of cost units. Feedback and feed forward control are concerned only with uncontrollable variances Email can be used by purchase department if it wants to ask for the price of specific material. If material cost variance is adverse then it might be because of efficient use of material. clock cards are used by companies to record labour hours Variance is an example of feedback control as well as feed forward control. Stores personal should prepare sales document Performance of profit centre can also be measured by comparing operating profit % of current year with budget of current year. Job cards are used by the companies to record details of employees output when they are working in different jobs. Management accounting will be total figures for the whole organization, whereas financial reporting information will be split into operational units. Preparation of financial accounts is a legal requirement. Memorandum includes data, name of recipient, name of person issuing the memo, and subject for it is written. Read only file means a file in which cannot be modified Feedback control takes place after a variance is reported; If material cost variance is adverse then it might be because of use of experienced labour. batch processing involves transactions being input and processed immediately

128.
129. 130.

131.
132. 2. 133. 134.

135.
136. 137. 138. 139. 140. 141.

142. 143. 144.


145.

146.
147. 148. 149. 150.

End of practice session

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