Month: January 2025

Alex plc has been strengthening its accounting and finance function.

Alex plc has been told that two purposes of their published and audited financial statements are to help users to assess how effectively managers are running the business and to make judgements about the likely levels of risk and return in the future.

Which of the following user groups of Alex plc’s published, audited financial statements is most likely to use accounting information for these purposes?

Select ONE answer:

1. Community representatives
2. Employees
3. Shareholders
4. Managers

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 == > Managers have stewardship over resources owned by the shareholders, so the shareholders use the financial statements to assess the quality and effectiveness of their stewardship. Shareholders own shares (which are risky investments) in the hope of earning a satisfactory return.
4. Not correct

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

Ken is an accountant with Alex plc.

Ken was recently asked to join a project team looking into Alex plc’s compliance with both FRC and IASB standards.

It appears, therefore, that Ken has been recruited into this project team in order to exploit his expertise in?

Select ONE answer:

1. Financial reporting
2. Performance measurement
3. Capital budgeting
4. Strategic management accounting

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 == > Financial reporting involves preparing financial information including the financial statements, tax and regulatory reporting.
2. Not correct
3. Not correct
4. Not correct

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

Which ONE of the following are characteristics of management accounting information rather than financial reporting information?

Select ONE answer:

1. It is governed by statute
2. It is primarily used by shareholders
3. It is likely to include budgetary information on the future of the business
4. It is likely to include a statement of cash flows

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 == > Management accounts are internal accounts used for managing the business. Financial reporting is regulated by accounting standards and statute and report on historical results; is used by shareholders; and will probably have a cash flow forecast – a statement of cash flows is an historical summary of cash flows and forms part of the financial statements
4. Not correct

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

Which ONE of the following are characteristics of management accounting information rather than financial reporting information?

Select ONE answer:

1. It is governed by statute
2. It is likely to include a cash flow forward forecast
3. It is primarily used by shareholders
4. It is likely to include a statement of cash flows

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 == > Management accounts are internal accounts used for managing the business. Financial reporting is regulated by accounting standards and statute and report on historical results; is used by shareholders; and will probably have a cash flow forecast – a statement of cash flows is an historical summary of cash flows and forms part of the financial statements
3. Not correct
4. Not correct

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

Which ONE of the following are characteristics of management accounting information rather than financial reporting information?

Select ONE answer:

1. It is both forward looking and historical
2. It is governed by statute
3. It is primarily used by shareholders
4. It is likely to include a statement of cash flows

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 accounts are internal accounts used for managing the business. Financial reporting is regulated by accounting standards and statute and report on historical results; is used by shareholders; and will probably have a cash flow forecast – a statement of cash flows is an historical summary of cash flows and forms part of the financial statements
2. Not correct
3. Not correct
4. Not correct

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