Tag: Financial Accounting

Ted, the chief executive of Alex plc is discussing the firm’s most recent financial statements with his finance director, Lucy.

Ted is not convinced about the usefulness of much of the information in the financial statements and specifically he makes three statements about the specific characteristics of the information that he feels may undermine its usefulness to him.

Statement 1 It lacks timeliness
Statement 2 A high level of regulation applies to it
Statement 3 It contains a high level of aggregation

Which of these statements identify characteristics that are likely to undermine the information’s usefulness?

Select ONE answer:

1. Statements 1 and 2 only
2. Statements 2 and 3 only
3. Statements 1 and 3 only
4. Statements 1, 2 and 3

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 == > Its lack of timeliness undermines usefulness. The high level of regulation does not undermine usefulness. The high level of aggregation it contains undermines usefulness.
4. Not correct

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

Each month the Finance School at Milford University in Staffordshire receives financial performance data for the previous month.

Each month the senior academics who manage the Finance School complain that they cannot rely on this information, as every month the information contains errors.

The information, therefore, is often ignored by these senior academics.

In terms of the qualities of a secure information system, the actions of the academics show that the system lacks the quality of?

Select ONE answer:

1. Confidentiality
2. Availability
3. Non-repudiation
4. Authorisation

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 == > Non-repudiation refers to the fact that information should not be open to being rejected by its recipients on the grounds of faults in the information system. It is one of the ACIANA qualities of a secure system.
4. Not correct

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

The Conceptual Framework for Financial Reporting states that financial information is deemed to be useful when it influences the decisions of users of the information and when it?

Select ONE answer:

1. Is produced in a timely fashion
2. Is complete and accurate
3. Establishes management accountability
4. Is produced in a cost-beneficial way

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 == > In addition to helping users make decisions, the Conceptual Framework for Financial Reporting states that financial information, in general, is useful when it shows the results of management’s stewardship of the resources entrusted to it, so that managers are thereby accountable to shareholders.
4. Not correct

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

Lucy Ltd increasingly makes use of the Internet as a source of information to support its decision-making and its strategy formulation.

The chief executive, Alex, however, is concerned about the company’s increasing use of information from the internet as it raises important concerns regarding the information’s?

Select ONE answer:

1. Completeness
2. Authority
3. Cost-effectiveness
4. Relevance

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 == > The major problem with the internet is uncertainty regarding whether the source of the information is a reliable one, i.e. whether it is authoritative.
3. Not correct
4. Not correct

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

Alex is the information systems manager of Lucy plc.

Alex is currently constructing a system for use by Lucy plc staff that includes both a ‘knowledge base’ and an ‘inference engine’.

It appears, therefore, that Alex is constructing which one of the systems below?

Select ONE answer:

1. A transaction processing system
2. A management information system
3. An expert system
4. A relational database system

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 == > These terms are part of what is called an expert system. The knowledge base contains the expert’s set of decision-making rules, and the inference engine applies the rules to the given circumstances being analysed.
4. Not correct

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