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Questions and Answers

What is the primary purpose of control in an organization?

  • To create new budgets for each department
  • To eliminate variances in financial reporting
  • To make comparisons between budget and actual achievements (correct)
  • To oversee the performance of all employees

    • Which type of decision is related to the long-term strategic goals of an organization?

  • Determining which market to enter (correct)
  • Adjusting marketing strategies for the quarter
  • Setting daily sales goals
  • Choosing suppliers for a product line

    • How is the Gross Profit Margin calculated?

  • Operating Profit x 100 / Total Assets
  • Gross Profit x 100 / Revenue (correct)
  • Gross Profit / Revenue
  • Operating Profit / Revenue

    • What does Return on Capital Employed (ROCE) measure?

    <p>Profit generated for every pound of assets employed</p> Signup and view all the answers

    What does the Current Ratio indicate about an organization?

    <p>The liquidity of the organization</p> Signup and view all the answers

    Why is the Quick Ratio regarded as the acid test?

    <p>It removes inventory from current assets</p> Signup and view all the answers

    What is indicated by the Inventory Holding Period?

    <p>The average length of time inventory remains unsold</p> Signup and view all the answers

    What is typically included in a budgetary control report?

    <p>Commitments and variances against budgets</p> Signup and view all the answers

    Which of the following best describes short-term decisions?

    <p>They assist with day-to-day operations of the business</p> Signup and view all the answers

    What does capital employed represent in the context of ROCE?

    <p>Total assets less current liabilities</p> Signup and view all the answers

    What is one of the main disadvantages of decentralised control?

    <p>It may reduce consistency across divisions.</p> Signup and view all the answers

    Which characteristic is typical of a tall organisation?

    <p>Higher operational costs due to numerous managers.</p> Signup and view all the answers

    In a flat organisation, which of the following is generally true?

    <p>Managers typically have a wide span of control.</p> Signup and view all the answers

    Which statement about the scalar chain is accurate?

    <p>It represents the number of management layers in an organisation.</p> Signup and view all the answers

    How does decentralised control empower local managers?

    <p>By encouraging them to be more innovative.</p> Signup and view all the answers

    What is a characteristic of a flat organisation?

    <p>Quick decision-making processes.</p> Signup and view all the answers

    What can be a negative impact of excessive management in tall organisations?

    <p>Increased costs and potential delays in decisions.</p> Signup and view all the answers

    What effect does decentralised control have on middle management's aspirations?

    <p>It prepares them for higher roles through decision-making.</p> Signup and view all the answers

    What does the payables payment period indicate?

    <p>The average number of days a business takes to pay its suppliers</p> Signup and view all the answers

    What is indicated by a high gearing ratio?

    <p>Lenders may hesitate to provide additional funding</p> Signup and view all the answers

    Which of the following is NOT a characteristic of accurate management information?

    <p>Obscure</p> Signup and view all the answers

    What distinguishes primary data from secondary data?

    <p>Primary data is collected specifically for the user's purpose.</p> Signup and view all the answers

    Which accounting type focuses on the preparation of financial reports to aid management?

    <p>Management Accounting</p> Signup and view all the answers

    Which type of information would HR typically send to the finance department?

    <p>Employee working hours and salary details</p> Signup and view all the answers

    What is a disadvantage of primary data compared to secondary data?

    <p>Primary data is often more expensive to collect.</p> Signup and view all the answers

    Why is timely information important for management?

    <p>It ensures decisions are based on relevant and current data.</p> Signup and view all the answers

    What is the purpose of cost accounting?

    <p>To track and analyze costs incurred within an organization</p> Signup and view all the answers

    What is external information?

    <p>Information gained from external sources outside the organization</p> Signup and view all the answers

    What is gross pay?

    <p>The initial wage calculation before deductions are made.</p> Signup and view all the answers

    Which of the following are considered compulsory deductions from gross pay?

    <p>National Insurance Contributions and income tax.</p> Signup and view all the answers

    What type of organisations are primarily funded by the central government?

    <p>Public sector organisations.</p> Signup and view all the answers

    How do private sector organisations typically receive funding?

    <p>From owners/shareholders and loans.</p> Signup and view all the answers

    What is a not-for-profit organisation primarily focused on?

    <p>Providing a benefit to the community.</p> Signup and view all the answers

    Which of the following best defines centralised control in an organisation?

    <p>Key decisions are made by top management with little delegation.</p> Signup and view all the answers

    What is one disadvantage of centralised control in an organisation?

    <p>Limited input from day-to-day experts.</p> Signup and view all the answers

    Which of the following best describes an organisational chart?

    <p>A chart depicting the hierarchy and structure of an organisation.</p> Signup and view all the answers

    What is a key characteristic of a cooperative?

    <p>It is owned and run by its workers who share the profits.</p> Signup and view all the answers

    Which structure may have fewer departments due to its size?

    <p>Sole traders.</p> Signup and view all the answers

    What is one primary reason for accountants to behave ethically?

    <p>To maintain the reputation and standing of the AAT</p> Signup and view all the answers

    Which of the following best describes fraud?

    <p>Deliberately deceiving someone to deprive them of their property</p> Signup and view all the answers

    What must information in financial statements adhere to?

    <p>It must be presented fully, honestly, and clearly</p> Signup and view all the answers

    Under what condition can accountants disclose confidential information?

    <p>With proper and specific authority or legal duty</p> Signup and view all the answers

    How can conflicts of interest affect AAT members?

    <p>They can hinder independence and objectivity</p> Signup and view all the answers

    What should AAT members do to exhibit professional behavior?

    <p>Comply with relevant laws and regulations</p> Signup and view all the answers

    Which of the following would NOT be a potential threat to independence?

    <p>Working under a different regulatory body</p> Signup and view all the answers

    What are two common forms of fraud in business?

    <p>Misappropriation of assets and intentional misrepresentation of financial statements</p> Signup and view all the answers

    What is required for accountants to prepare financial statements properly?

    <p>Sufficient technical knowledge according to accepted standards</p> Signup and view all the answers

    Why is it important for accountants to be objective?

    <p>To avoid biases that may distort financial data</p> Signup and view all the answers

    Which of the following is NOT a category in PESTLE analysis?

    <p>Financial</p> Signup and view all the answers

    Which external factor is primarily concerned with government regulations and policies?

    <p>Political</p> Signup and view all the answers

    What is one of the weaknesses a company may face related to its internal accounting systems?

    <p>Outdated procedures</p> Signup and view all the answers

    Which recommendation can address multiple weaknesses within a company?

    <p>Establishing a training program</p> Signup and view all the answers

    What social factor could significantly impact a business's market strategy?

    <p>Health-conscious behaviors</p> Signup and view all the answers

    How should a business respond to PESTLE influences to be effective?

    <p>Develop strategic responses</p> Signup and view all the answers

    Which of the following is considered a technological factor in PESTLE analysis?

    <p>New product development</p> Signup and view all the answers

    What is a common staff reaction to changes in policies and procedures?

    <p>Negative response despite potential benefits</p> Signup and view all the answers

    Which of the following is an example of a legal factor that may affect a business?

    <p>Data protection laws</p> Signup and view all the answers

    What should a company consider before making changes to policies and procedures?

    <p>The potential impact on staff</p> Signup and view all the answers

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