Management Accounting Information

This assignment delves into the crucial aspects of maintaining accurate and reliable management accounting information. It explores concepts like data integrity, variance analysis, backup schedule importance, and the relevance of Australian Standard: Record Management in ensuring the quality of financial data. Students are tasked with answering questions related to these topics, demonstrating their understanding of best practices for managing financial information within an organization.

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Assessment Details
Qualification Code/Title
Assessment Type Assessment -01 -Written Assessment Time allowed
Due Date Location AHIC Term / Year
Student Details
Student Name Student ID
Student Declaration: I declare that the work submitted is my own,
and has not been copied or plagiarised from any person or source.
Signature: ____________________________
Date: _____/______/__________
Assessor Details
Assessor’s Name
RESULTS (Please
Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
........................
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I am also aware of my appeal rights.
Signature: _______________________________
Date: ______/_______/___________
Assessor Declaration: I declare that I have conducted a fair, valid,
reliable and flexible assessment with this student, and I have
provided appropriate feedback.
Signature: ________________________________________
Date: ______/_______/___________
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 1 of 9
Unit of Competency
National Code/Title FNSACC507 Provide management accounting information

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Instructions to the Candidates
 This assessment is to be completed according to the instructions given below in this document.
 Should you not answer the tasks correctly, you will be given feedback on the results and gaps in knowledge.
You will be entitled to one (1) resubmit in showing your competence with this unit.
 If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.
 Please refer to the College re-submission and re-sit policy for more information.
 If you have questions and other concerns that may affect your performance in the Assessment, please
inform the assessor immediately.
 To be deemed competent for this unit you must achieve a satisfactory result with tasks of this assessment
along with a satisfactory result for the other assessment (Project)
 This is an Open book assessment which you will do in your own time but complete in the time designated by
your assessor. Remember, that it must be your own work and if you use other sources then you must
reference these appropriately.
 This is Individual Assessments. Once you have completed the assessment, please provide the Hard copy of
the Assessments to your Trainer/ Assessor.
 Plagiarism is copying someone else’s work and submitting it as your own. Any Plagiarism will result in a mark
of Zero.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 2 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Question 1
Identify and describe (120–150 words) cost behaviour characteristics for the different cost
elements of a product or service.
Answer:
The cost elements of a product or service refer to the elements that are included in the cost of production of that
particular product or in the execution of the required services. These elements can be broadly categorized into
direct costs and indirect costs. Furthermore the fixed cost and variable cost can be further divided into categories
namely Direct and Indirect Material; Direct and Indirect Labor; Direct and Indirect Expenses; Factory Overhead;
Selling and Distribution and Administrative Overhead.
Cost behavior refers to the way in which a specific cost reacts to the changes in the levels of activity. It should be
noted here that some costs remain the same with change in the activity levels, these are the fixed costs. Fixed
costs remain the same irrespective of the number of units sold or produced.
The costs that change with the change in the number of units produced are known as the variable costs. Each
element of cost can be either fixed or variable depending on the nature of the job.
Question 2
What is a double entry bookkeeping system and what are its advantages? Discuss in 150–180
words.
Answer:
The double entry book keeping system is the system that is used by each and every accountant worldwide. It
essentially refers to the recording of the same transaction twice. This is because every business transaction leads
to minimum two changes in the financial position of the company therefore it has to be recorded twice. For
instance when a particular firm buys machinery for the purpose of business then its books of accounts will be
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 3 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
affected twice that is the machinery account increases by the amount with which the machine was bought and the
cash account decreases by the same amount. Thus for each transaction the double entry bookkeeping system
involves a debit as well as a credit entry. For each debit entry there has to be a corresponding credit entry and for
each credit entry there has to be a corresponding debit entry.
The advantage of a double entry bookkeeping system is that it records a particular transaction completely by
recording it from both the aspects. The double entry bookkeeping system is designed in such a way that the
arithmetical accuracy of the entries can be verified by matching the total of the credit balance with the
corresponding debit balance. The double entry bookkeeping system also leads to the preparation of a accurate
balance sheet that in turn leads to determination of the financial position of the company.
Question 3
What is accrual accounting and why is it the preferred method for accounting? Discuss in 150–180
words.
Answer:
Accrual accounting is the most adopted method of accounting all over the world. This is because accrual
accounting tends to give a more clarified and proper view of the financial position and the condition of the
company. Accrual accounting essentially refers to that system of accounting that which records financial
obligations as and when they arise. The accrual basis of accounting tends to record and match the expenses and
revenue associated with a particular cost. In simpler terms accrual accounting records the revenue or expenses at
the time when they have been incurred irrespective of the time when actual cash is exchanged. Now the accrual
basis of accounting is a preferred method because it very accurately discloses the liquidity position and the
profitability of the business. Accrual accounting also can help in deferring the tax liability of a firm. It offers enough
flexibility to a firm for the purpose of effective tax planning. Therefore accrual basis of accounting is preferred by
all large scale organizations.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 4 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Question 4
Discuss (150–180 words) the application of policies and procedures to managing accounting
information.
Answer:
The application of policies and procedures for managing accounting information is very important. This is because
without the application of certain laid down policies and procedures the accounting information derived in a
particular financial year cannot be properly recorded. Moreover each and every accountant will record a certain
accounting information or transaction in his own desired leading to confusion and mayhem. Therefore the
application of common policies and procedures lead to a uniformity in accounting treatments and help the users
of the accounting statements to compare different entities on the basis of their financial statements as they have
been prepared following the same policies and procedures thus facilitating effective comparison. The advantages
of application of policies and procedures are segregation of roles of employees; review of the quality of the
financial records; detection of fraud or other errors in the books of accounts; preparation of accurate budgets and
ensuring optimum utilization of resources.
Question 5
What are the key management information requirements? Discuss in 120–150 words.
Answer:
The key management information requirements are learning management systems; records management;
collaboration; web content management; information about the processes in business; organization structure;
personnel information. Therefore the key management information primarily revolves around the people of the
organization, its processes, the technology utilized and the content used. The key management information is
essential for the management of an organization for the purpose of managing the affairs of business properly and
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 5 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
execution of the processes of business. The basic method by which the key management information is derived is
by asking the staff of the different departments of the organization, obtaining of information from the already
existing information system, synthesizing from the characteristics of the utilizing system and further investigation
into an information system.
Question 6
Discuss (150–180 words) the process of preparing a budget.
Answer:
A budget is essentially the estimated overview into the expected proceedings of business for a particular financial
year. Most of the budgets are prepared with the purpose of comparison between the results obtained with the
budgeted results. The process of preparing a budget follows certain steps:
 Obtaining the assumptions from the last budget and using them in the current budget preparation.
 Determining the capacity level of the bottlenecks
 Determining the total amount of funding that will be available in the course of the budgeted period
 Decision making on whether step cost will be incurred during the period of budgeting
 Creation of an appropriate budget package.
 Issuance of the budgeted package and clearing the related doubts
 Obtaining the revenue forecast from the organizational head
 Obtaining the required budgeted estimates from the different departments of the organization
 Obtain the capital budget requests
 Preparation of the final budget
 Reviewing the budget
Thus these are the major steps in the preparation of a budget.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 6 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Question 7
What is the relationship between variance analysis reports and system integrity? Discuss in 120–
150 words.
Answer:
Variance refers to the difference between the budgeted and the real figures of a certain component regarding
which a certain budget has been prepared. The relationship between variance analysis and system integrity is that
higher the system integrity of a certain organization higher will be the accuracy of the variance analysis executed.
This means that variance analysis and system integrity are positively correlated with each other. The system or
more specifically the costing system provides the required output to perform variance analysis therefore it is very
important to maintain the integrity of the costing system. The variance analysis report is directly related to the
system integrity therefore controls should be implemented in the organization in order to maintain the quality and
genuineness of the data that is entered in to the system.
Question 8
Why should backup schedules be reviewed and why is undertaking such a practice important?
Discuss in 120–150 words.
Answer:
The backup schedules should be reviewed in order to maintain the quality and the integrity of the data or
information that is entered into the system for the purpose of record or reference in the future. Back up schedule
refers to the schedule that is done periodically by an organization in order to create a storage or back up of the
important files in case the system crashes down or gets corrupted in the future. Undertaking such a practice is
important because the data that is stored in the system feeds the entire process of preparation of budgets and
other financial operations that aim to provide an overview into the financial performance and condition of the
company. Now maintaining the backup system will protect the data from virus or crash or corruption. Backing up
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 7 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
also includes client information which is crucial for every organization thus scheduling data backup is important
and should be done in regular intervals.
Question 9
Explain (150–180 words) the relevance of Australian Standard: Record Management to
maintaining management accounting information.
Answer:
The Australian Accounting Standards Board provides the standards for the purpose of the management of records
related to accounting information. They set down the following standards:
 Each employee should be given access to only the data that they require. This is because giving access to
the employees to unnecessary information and data increase the chances of mistakenly deleting certain
information.
 Secured logins and passwords should be used for accessing the different levels of information.
 Awareness programs about the data protection should be conducted inside the organization.
 Data is most vulnerable during the process of transfer. Therefore adequate measures should be taken
while transferring data using the internet or any other storage device.
 Segregation of duties should be implemented inside the organization to monitor the recording of data so
that no fraudulent activity is executed.
 The management should also maintain a balance between the restrictions imposed in relation to recording
the data and convenience provided to the employees for carrying out their duties.
Question 10
Describe (120–150 words) the process of collating, coding, and classifying data in preparation for
processing.
Answer:
Data collection refers to the process of collecting or gathering required information and measuring or
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 8 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
evaluating the information on the basis of variables of interest, in an established design that allows an
individual to answer the research related questions and carry out the evaluation of the results or
outcomes. Data coding on the other hand refers to the process of creation of a storage media that
records all the information that is obtained from the assigned questionnaires. The process of coding
usually refers to a code that is assigned to each possible response to the questionnaires provided. Thirdly
the classification of data refers to the process of categorizing the obtained data according to the specified
guidelines or classes that depend upon the nature of research. Data classification results in retrieving the
data very easily and is one of the fundamental steps in processing of data.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name:FNSACC507 Provide management accounting
information
Version 2.0/ August 2017 Review Date:
February 2018
Page 9 of 9