Chap 7 Finance Function Insights | Business Technology and Finance | Học viện Tài chính

1.Collinson plc is a medium-sized group operating at four location in the UK. It
operates a centralized finance function and is concerned that the function as a whole
is not performing well. Centralization of this finance function is least likely to be effective in:
a. External reporting to shareholders
b. Recording financial transaction c. Managing cash
d. Internal reporting to operational managers
2.Maureen is employed in the finance function of Gralam plc. Her duties are to
ensure that the company always has sufficient funds available to meet both its short-
term and long-term financial requirements. It is clear that Maureen is employed by Gralam plc in its:* 1 điểm a. Financial reporting section
b. Management accounting section
c. Treasury management section
d. Transaction processing section
3. Regarding the finance function, preparing internal reporting for planning and
control to those charged with management and governance is the main task of:* 1 điểm a.Management accounting.
b.Recording financial transactions. c.Financial reporting. d.Treasury management.
4.Harold is an accountant with Farmworth plc. He was asked to join a project team
examining the company’s compliance with both IFRS and ISAB standards. It
appears, therefore, that Harold has been recruited into this project team to exploit his expertise in:* 1 điểm a. Financial reporting b. Performance measurement c. Corporate governance d. Information system
5.Novel plc is establishing its accounting and finance function. The company has
been told there are two purposes of published, audited financial statements. These
are to help users assess how effectively managers are running a business, and to
make judgements about the likely levels of risk and return in the future. Which of the
following user groups of Novel plc’s published, audited financial statements is most
likely to use accounting information for these purposes?* 1 điểm a. Community representatives b. Employees c. Shareholders d. Managers
6.When a company’s finance function prepares financial statements in accordance
with legal rules and accounting standards, it is engaged in the support activity of:* 1 điểm
a. Record-keeping and stewardship b. Planning and control c. External reporting d. Internal reporting
7.Mainstream Ltd’s finance director is establishing an effective system in the finance
function for producing management accounting reports. Which issue should be the
finance director’s primary consideration?* 1 điểm
a. The information needs of the company's manager
b. The need for effective internal control mechanism
c. The need for cost-effectiveness
d. The need for effective information security
8.Tram plc’s finance function must provide information to management on the
company’s balanced scorecard. This role is undertaken as part of Tram plc’s:* 1 điểm a. Statutory audit requirement
b. Financial reporting function c. Treasury management process
d. Performance measurement system
9.“Effectiveness”, “Economy”, and “efficiency” are often mentioned with reference to
resource use. Match these terms with the definition below: (1) A reduction of
containment of costs; (2) Achieving maximum output at minimum cost; (3) The
measure of achievement by reference to objectives* 1 điểm
a. 1 = effectiveness; 2 = economy; 3 = efficiency
b. 1 = economy; 2 = efficiency; 3 = effectiveness
c.1 = efficiency; 2 = effectiveness; 3 = economy
d.1 = economy; 2 = effectiveness; 3 = efficiency
10.Which statement about critical success factor (CSFs) for a business is true?* 1 điểm
a. Low cost will always be a CSF; high sales revenue will always be a CSF
b. Low cost will always be a CSF; high sales revenue will not always be a CSF
c. Low cost will always not be a CSF; high sales revenue will always be a CSF
d. Low cost will not always be a CSF; high sales revenue will not always be a CSF
11.Three basic approaches to performance measures are measures of economy,
efficiency and effectiveness. Economy is measured by:*
a. The amount of resources used for the tasks that have been achieved
b. The success in achieving goals and targets
c. Team member satisfaction and the motivational climate
d. The success of the team or work group in controlling its costs
12.A consultant has made two statements about the primary focus of the users of
financial statements of an entity. Statement (1) – The primary focus of suppliers is on
the entity’s risk and return; Statement (2) – The primary focus of shareholders is on
the entity’s solvency. Identify whether each statement is true or false.* 1 điểm
a. Statement (1) true; Statement (2) false
b. Statement (1) false; Statement (2) false
c. Statement (1) true; Statement (2) true
d. Statement (1) false; Statement (2) true
13.Tom works in the finance function of Bateman Ltd., which trades with many
companies around the world. His duties involve managing the company’s foreign
exchange requirements. From this it can be seen that Tom is employed by Bateman
Ltd in its finance function’s:* a. Financial reporting section
b. Management accounting section
c. Treasury management section
d. Financial transaction recording system
14.Chinward Ltd manufactures garden furniture from recycled wood and wishes to
apply the sustainability reporting standard issued by the Global Reporting Initiative
(GRI) in its sustainability reporting.Statement (1): Under the environmental section of
the report, the company should identify the total weight of wood used in the
manufacture of its products in the financial period. Statement (2): Under the social
section of the report, the company should identify the number of new workers
employed in the financial period by age, gender and region. Identify whether each statement is true or false.
a. Statement (1) true, Statement (2) false
b. Statement (1) true, Statement (2) true
c. Statement (1) false, Statement (2) false
d. Statement (1) false, Statement (2) true
15.Historically, the role of the finance function at Delbin plc has been viewed
primarily in terms of reporting and control. However, the senior management team at
Delbin plc are keen on for the finance function to have more role as a business
partner. In which of the following should members of the finance function expect to
become increasingly involved as a result of the business partnering role?D1-
formulating strategies; 2- commercial decision making and negotiations; 3-provision
of accurate accounting information. a. (1) and (2) only b. (1) and (3) only c. (2) and (3) only d. (1),(2), and (3)
16.DMai is employed in the finance function. Her duties are to ensure that her
company always has sufficient funds available to meet its financial requirements. Mai is in her company’s:D* a.Management accounting.
b.Recording financial transactions. c.Financial reporting section.
d.Treasury management section.
17.Regarding the finance function, preparing financial statements for external users is the main task of:* a.Management accounting.
b.Recording financial transactions. c.Financial reporting. d.Treasury management.
18.Regarding the finance function, managing cash budgets, working capital,
investments, and raising long-term finance are the main tasks of:* a.Management accounting.
b.Recording financial transactions. c.Financial reporting. d.Treasury management.
19.Regarding types of performance measures, the quantity of product produced in
relation to the resources put in is included in:* a.Profitability measures. b.Productivity measures. c.Liquidity measures. d.Solvency measures.
20.Regarding types of performance measures, “net margin of 10% on revenue of $100,000” is included in:* a.Profitability measures. b.Productivity measures. c.Liquidity measures. d.Solvency measures.
21.When a company’s finance function prepares financial statements in accordance
with legal rules and accounting standards, it is engaged in the support activity of:D* a.Stewardship. b.Planning and control. c.External reporting. d.Internal reporting.
22.TR plc’s finance function must provide information to management on the
company’s balanced scorecard. This role is undertaken as part of TR plc’s:* a.Statutory audit requirement.
b.Financial reporting function. c.Treasury management process.
d.Performance measurement system.
23.In the balanced scorecard, measures of profit margins and return on capital would be included in:*
a.Financial perspectives measures.
b.Customer perspectives measures.
c.Internal business process perspectives measures.
d.Innovation and learning perspectives measures.
24.Regarding the measure of resource use, which of the following is the definition of “Economy”:*
a.A reduction of containment of costs.
b.Achieving maximum output at minimum cost.
c.The measure of achievement by reference to objectives.
d.The level of performance for the business to outperform rivals.
25.Regarding the measure of resource use, which of the following is the definition of “Efficiency”:*
a.A reduction of containment of costs.
b.Achieving maximum output at minimum cost.
c.The measure of achievement by reference to objectives.
d.The level of performance for the business to outperform rivals.
26.Regarding the measure of resource use, which of the following is the definition of “Effectiveness”:*
a.A reduction of containment of costs.
b.Achieving maximum output at minimum cost.
c.The measure of achievement by reference to objectives.
d.The level of performance for the business to outperform rivals.
27.Which of the following characteristics belongs to management accounting information?*
a.It is governed by legal regulation.
b.It is primarily used by shareholders.
c.It is likely to include a cash flow forecast.
d.It is likely to include a statement of cash flows.
28.When the finance function works alongside other business functions rather than
being a separate function of their own, it means:* a.Financial innovation. b.Business partnering. c.Business analysis. d.Financial reporting.
29.Management of working capital is the function of which section?* a.Financial reporting. b.Treasury management. c.Management accounting.
d.Recording financial transactions.
30. Managers use performance measurement for:*
a.Making investment decisions on buying a stock.
b.Expanding loans for a company. c.Controlling and planning.
d.Making investment decisions on selling a stock.
31.Managing the company’s foreign exchange requirements belongs to which of the
following section in the finance function?* 1 điểm a.Financial reporting section.
b.Management accounting section.
c.Treasury management section.
d.Financial transaction recording section.
32.Thu works in the finance function of AB Ltd. Her duties involve maintaining the
sales ledger and providing information to the credit control department. Thu is
employed by AB Ltd in its finance function’s:*
a.Management accounting section.
b.Financial transactions recording section.
c.Financial reporting section. d.Treasury management section.
33.Which three of the following are characteristics of management accounting information rather
than financial reporting information
A.It is both forward looking and historial B.It is governed by statue
C.It is primarily used by shareholders
D.It is likely to include a statement of cash flows
E.It is likely to include a cash flow forecast
F.It is likely to include budgetary information
1.Linus is an accountant for Magna plc, which is considering a substantial new project. Linus has been
asked to help in determining whether it should be financed by retained earnings, equity, loans or a
mix of all sources. It would appear that Linus is employed by Magna plc's finance function's:
A. transaction recording section
B. treasury management section C. financial reporting section
D. management accounting section
2. Moody plc is reviewing its internal control system. Its control activities should be directed at controlling: A. threats to its operations B. its operations
C. threats to achievement of its objectives
D. achievement of its objectives
3. In the balanced scorecard, measures of how quickly and fully employee suggestions are
implemented would be included in:
A. financial perspective measures
B. customer perspective measures
C. internal business process perspective measures
D. innovation and learning perspective measures
4. Anja works in the finance function of Mark Ltd. Her duties involve maintaining the sales ledger,
and providing information to the credit control department. It is clear that Anja is employed by Mark Ltd in its finance function's: A. financial reporting section B. treasury management section
C. management accounting section
D. financial transaction recording section
5. Sven, a management accountant, is currently helping to prepare a performance report which uses
the balanced scorecard technique. Sven is calculating measures of product quality and product
failure rates. The measures calculated by Sven will be included in the final balanced scorecard's: A. financial perspective
B. internal business process perspective
C. innovation and learning perspective D. customer perspective
6.Kennedy plc wants to introduce a control activity within its finance function to address a recent
problem. The figure shown for trade payables in Kennedy plc's interim financial statements, taken
from the total trade payables account in the nominal ledger, was understated by a large amount. This
was an invoice entered in a major supplier's account in the purchases ledger only. The required control activity is: A. reconciliation B. security of assets C. segregation of duties
D. review of operating performance
7.Someday plc is introducing a set of performance measures in its finance function. A key measure
for the sales ledger part of the system is the number of invoices recorded per hour of employee time.
The point of reference for this performance measure is: A. productivity B. activity C. profitability D. economy
8. Raj plc operates supermarkets. The company has identified that it will outperform its rivals if it
always has inventory of its 100 top-selling products in its shops. Availability of these items is Raj plc's: A. key performance indicator B. core competence C. target
D. critical success factor