Month: January 2025

Ken is advising the managing director, Lucy, of Alex plc of the advantages of setting standards and targets to help specify the levels of performance that underpin the company’s control system.

Which ONE of the following are should be one the main components of the company’s control system?

Select ONE answer:

1. Identification of deviations from the plan
2. Establishment of standards or targets to express planned performance
3. Measurement of ideal performance
4. Devising the plan

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Any control system should have the major components of Measurement Of Actual Performance And Comparison against Targets; Establishment of Standards or Targets to Express Planned Performance; and Follow-up Action to Correct Adverse Results or to Exploit Favourable Variances. The other choices are secondary.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Ken is advising the managing director, Lucy, of Alex plc of the advantages of setting standards and targets to help specify the levels of performance that underpin the company’s control system.

Which ONE of the following are should be one the main components of the company’s control system?

Select ONE answer:

1. Identification of deviations from the plan
2. Measurement of ideal performance
3. Measurement of actual performance and comparison against targets
4. Devising the plan

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Any control system should have the major components of Measurement Of Actual Performance And Comparison against Targets; Establishment of Standards or Targets to Express Planned Performance; and Follow-up Action to Correct Adverse Results or to Exploit Favourable Variances. The other choices are secondary.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex Ltd’s finance director Lucy wants to establish an effective system in the accounting and finance function for producing management accounting reports for the senior management team led by the Chief Executive, Ken.

In establishing such a reporting system, which of the following issues should be Lucy’s primary consideration?

Select ONE answer:

1. The information needs of the company’s senior managers
2. The need for effective internal control mechanisms
3. The need for cost-effectiveness
4. The need for effective information security

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > Management accounting is driven not by rules or standards but by the need to meet the information requirements of the senior managers led by Ken within Alex Ltd, who will use the information to plan, control, make decisions and monitor performance.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

When a company’s accounting and finance function prepares financial statements in accordance with legal rules and accounting standards, it is engaged in the support activity of?

Select ONE answer:

1. Record-keeping and stewardship
2. Planning and control
3. External reporting
4. Internal reporting

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > External reporting is financial reporting – producing financial statements which are used primarily by external users.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.