FNSACC507: Assessment of Providing Management Accounting Information

This document presents a completed assessment for the FNSACC507 unit, focusing on providing management accounting information. The assignment addresses several key areas, including the identification and description of cost behavior characteristics, explaining double-entry bookkeeping and its advantages, discussing accrual accounting and its preference in accounting, outlining the application of policies and procedures in managing accounting information, identifying key management information requirements, detailing the process of preparing a budget, and explaining the relationship between variance analysis reports and system integrity. The student's responses provide detailed explanations and examples to demonstrate understanding of these core accounting principles.

Assessment
Details
Qualification Code/Title
Assessment Type Assessment -01 -Written Assessment Time allowed
Due Date Location AHIC Term / Year
Unit of Competency
National Code/Title FNSACC507 Provide management accounting information
Assessor Details
Assessor’s Name
RESULTS (Please
Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
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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: ______/_______/___________
File Name: FNSACC507 Provide management accounting information
Version 2.0/ August 2017
Review Date: February 2018
Page 1 of 12

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 feedback readyassessor 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.

Question 1
Identify and describe (120–150 words) cost behaviour characteristics for the different cost
elements of a product or service.
Answer:
Cost element is the activity based costing which is associated with the manufacture of particular
product. These cost can be direct on indirect. Elements of cost are categorised into three
parts,i.e., material, labour and expenses.
1) Material cost: It is a cost associated with manufacturing products or units. Material which
are of integral part in the production of a unit and are directly identifiable is known as
direct material cost (Schröder,Falk and Schmitt, 2015). Example of direct material are
raw material, books in paper, bricks in construction.
Indirect material are the cost which do not become part of finished goods and are not identifiable.
Examples are consumables, oil, printing, etc.
2) Labour cost: Employees of an organisation work together to transfer raw material into
finished goods against which salaries and wages are paid to them. Employees who are
directly engaged in the activity of production, supervision and conversion of material into
finished goods are known as direct labour (Sangster, 2015). Any cost which is indirectly
associated with the production of goods is called indirect labour cost.
3) Expenses : Expenses which are necessary to be incurred for production of goods like
machinery is called direct expenses (Court of Appeal, 2018). Expense which are not
directly associated with the production of business like factory rent, lighting, selling and
distribution is called indirect expenses.
4) Overheads: These are indirect cost associated with production of goods.
Question 2
What is a double entry bookkeeping system and what are its advantages? Discuss in 150–180
words.
Answer:
Double entry book keeping system is an accounting concept to measure, record, classify and
summarize the financial transaction of business in a systematic manner. Double entry book
keeping records dual aspect of every financial transaction that states that each transaction has
two sides, i.e., for each debit entry there is a corresponding credit entry (Modugno and Di
Carlo, 2019).
Advantages of double entry book keeping system:
1) Complete balance sheet is prepared by recording all aspects of assets, liability, expense,
revenue and capital.
2) It helps in evaluating financial position of the company effectively.
File Name: FNSACC507 Provide management accounting information
Version 2.0/ August 2017
Review Date: February 2018
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3) It reduces frauds and errors by tracing transaction through accurate audit trial.
4) Financial statements can be easily prepared using double entry book keeping system.
5) Necessary information regarding financial transaction can be obtained speedily and easily
(Warren Jr, Moffitt and Byrnes, 2015).
6) This also helps management in strategic decision-making for increasing operational
efficiency and profitability of business.
7) The matching principle helps company ascertain profit and loss for particular financial year
and can also compare statements with previous year for effective decision-making
(Crown Court procedure and process in the UK, 2018).
Question 3
What is accrual accounting and why is it the preferred method for accounting? Discuss in 150–180
words.
Answer:
Accrual accounting method records financial transaction in the books at the time of happening of
an event irrespective of whether cash received or not. Revenues and assets earned and expenses ,
losses and liabilities incurred without any cash transaction has to be recorded in the books of
accounts (Choi, 2016). It helps company in credit transaction and shows clear image of the
profitability of the company by recording actual transaction at the time of occurrence of an event.
Accrual accounting method shows better picture of the overall financial position of the company
by recording transaction at the time of occurrence. This method is accepted by GAAP( Generally
accepted accounting principles) and issued by Financial Accounting Standards board (FASB). This
method helps in effective analysis of business performance and efficient decision making which
increases operational efficiency and productivity of business by analysing budget and predicting
sales and expenses (Erlina and Muda, 2017). This method helps in matching revenues and
expenses for the particular period and keeps a track on inflow and outflow of cash ( What is the
difference between a Magistrates’ Court and a Crown Court?, 2018). Accrual method of
accounting is most preferred method of accounting as it reduces manipulation of cash flows and
show exact figure in financial statement at the time transaction was occurred.
Question 4
Discuss (150–180 words) the application of policies and procedures to managing accounting
information.
Answer:
Accounting policies are specific set of standards which are implemented by management to
prepare financial statements of the company. These accounting policies are in compliance with

Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards
(IFRS). Management of the organization implement various set of conventions, methods,
measurements and procedures which helps management in maintaining uniformity and
consistency while preparing financial statement for the particular period. This helps management
in correct accounting treatment and increases efficiency of financial statements (Said, Alam and
Khalid, 2016).
Accounting procedure is a standardised method which are to followed by management while
recording financial transactions. They take into consideration both financial and non financial
transaction for effective decision making. They use effective accounting method and estimate
account payables and receivables for consistency in day to day transactions of business ( Actus
Reus, 2018). They maintain books and records for tracking past performance and compare it with
current performance for effective analysis and decision making. Management or accountant of
organization evaluate the cost and structure the financial plan for the period manage cash flows
of the of the company.
Question 5
What are the key management information requirements? Discuss in 120–150 words.
Answer:
Management of the organisation is responsible for the development and success of the business.
It helps in strategic decision making to improve operational efficiency of organization.
Management of the organization is responsible for planning and defining key aspects for
development of business for which it requires reports, financial statements like balance sheet ,
income statements, cash flow statement , statement for changes in owner's equity or
shareholder's equity for effective decision making and determining future goals and mission to
increase operational efficiency and productivity (Dobiáš, Casseau and Sinnen, 2018) .
Management is also responsible estimating cost by analysing various cost reports which helps
identifying cost associated with various action plan and develops a strategy to minimize cost and
achieve economies of scale which ultimately help in the success of the company.
Management also monitor and report progress to its superiors and communicate the same with
its subordinates by evaluating information through various statistics and budget plan. This helps
management in analysing whether target has achieved by comparing it with the actual plan and in
case of any deviation necessary action is taken (Types of courts in the UK, 2018.).
Question 6
Discuss (150–180 words) the process of preparing a budget.
Answer:
File Name: FNSACC507 Provide management accounting information
Version 2.0/ August 2017
Review Date: February 2018
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Budget is a strategic quantitative financial plan for a particular financial year . Budget helps in
estimating the cost, sales, expenses, revenue, assets, liabilities and capital of the organisation
( Young and et.al.,2016.
). It helps in planning operations for the future and motivate employees of the organisation to
strive for the set objective effectively.
Process of preparing a budget:
1) Setting assumption and estimation for sales, production and evaluating last budget plan
to identify the constraints and take necessary measures.
2) Identifying goals and objective of business which are to be achieved during financial year
(Plant and Stanton, 2015)..
3) Identifying the funds available to achieve goals of organisation ( Joyce-Wojtas and
Keenan, 2016.).
4) Management evaluates and review the plan effectively and communicate same to the
concerned departments.
5) Final budget plan is implemented by various departments by providing them with
required material, labour and machinery to effectively carry out the plan.
6) Performance report are prepared to evaluate the effectiveness of the budget plan which
help analyse whether goals are achieved. Actual performance is measured with the
budget plan and in case of any deviation necessary action is carried out to increase
operational efficiency (Hughes and et.al., 2016).
Question 7
What is the relationship between variance analysis reports and system integrity? Discuss in 120–
150 words.
Answer:
Variance analysis in management accounting is the deviation from budgeted or actual plan. The
main objective of variance analysis is to control cost and increase profit by achieving economies
of scale (Fitzpatrick and Williams, 2017). This helps management in measuring the cause of
variance and find necessary solution to increase the efficiency and productivity of business by
determining reasons for deviations and applying accurate policies and procedures . Management
can even identify the cause of variance for which controllable measures are taken by the
management of organisation. When management gets actual result lower than the standardised
cost then there is increase in efficiency of business. Management of the organisation can easily
evaluate the department in which variance has occurred and can fix the problem efficiently.
System integrity and variance analysis are interrelated as it follows fixed set of rules which are
intended to be performed with consistency to lower the deviation from actuals and achieve
target effectively in cost efficient manner (McCarrick, Davis-McCabe and Hirst-Winthrop,
2016).
Question 8

Why should backup schedules be reviewed and why is undertaking such a practice important?
Discuss in 120–150 words.
Answer:
Backups are done in consistent manner to review the budgeted plan and it also helps in restoring
the entire plan to work effectively and increase operational efficiency and productivity. Backups
are done in consistent and timely manner to restore important financial documents and get
access to them quickly and effectively (Bandes, 2016). Backup schedule on a timely manner
helps to retain important files which helps in important decision making and prevent loss of
important data. It is important to save data in a computer system using various software and
backing them up to help retain important information like financial statements, reports, budget ,
cost report which are important for effective planning and decision making which enhances
productivity and efficiency of the organisation ( Elison and et.al., 2016).
Question 9
Explain (150–180 words) the relevance of Australian Standard: Record Management to
maintaining management accounting information.
Answer:
Australian standards are set of documents which determine specific guidelines and procedures
which are to be followed consistently for better interaction and speedy growth of business. It also
helps in analysing the all things in better manner (.Hohl and Stanko, 2015.). Thus, records needs
to be easily located for business purposes with the legal acceptance. In addition to it, relevant
polices, guideline all must be framed so that one proper action can be taken. The standard applies
to the management of records in the proper formats and it also helps to provide framework for
organisations that work as to establishing a record's for the management system or auditing
existing policies and procedures (Newbury-Birc and et.al., 2016).
Question 10
Describe (120–150 words) the process of collating, coding, and classifying data in preparation for
processing.
Answer:
Coding is referred to as assigning numbers or letters to various variables using data analysis for
fast and effective search in database (Bradshaw, 2016). Different organisation has different
coding system there is no particular unique way of processing data. Large and complex database
can be easily extracted and help filter and detect inconsistencies in data which increases
efficiency. It helps managing different accounts accurately which helps in better structure.
Classification in data processing helps in systematically segregating data into different
File Name: FNSACC507 Provide management accounting information
Version 2.0/ August 2017
Review Date: February 2018
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departments. Classification of data is the process of organising data in a systematic manner on the
basis of quantitative and qualitative classification.

REFERENCES
Book & Journal
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Sangster, A., 2015. The genesis of double entry bookkeeping. The Accounting Review, 91(1),
pp.299-315.
Modugno, G. and Di Carlo, F., 2019. Financial Sustainability of Higher Education Institutions: A
Challenge for the Accounting System. In Financial Sustainability of Public Sector
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Warren Jr, J. D., Moffitt, K. C. and Byrnes, P., 2015. How Big Data will change
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Choi, T. M., 2016. Introduction: key decision points and information requirements in fast fashion
supply chains. In Information systems for the fashion and apparel industry (pp. 1-8).
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Erlina, A. S. and Muda, I., 2017. Antecedents of Budget Quality Empirical Evidence from
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