Managing Finance in a Digital World (E1) Free Practice Test

Question 1

Stephanie has just secured a job as a management accountant for a well-known banking firm. She needs to understand the organisation's financial position.
What should she do first in order to gain this understanding?

A. Record the organisation's transactions in the books of prime entry.

B. Submit the company's accounts to the IFRS.

C. Inform the tax authorities of the organisation's revenues.

D. Total all the day books and enter them into ledgers.

Correct Answer: A

Question 2

Which of the following organisations would best describe a 'professional bureaucracy'?

A. A hospital

B. A manufacturing company

C. A newsagent

D. A project based company

Correct Answer: A

Question 3

The development of technical maps of rules and data structures would be part of which level of a data modelling process?

A. Visualisation

B. Conceptual

C. Physical

D. Logical

Correct Answer: D

Question 4

Which of the following provides the best description of an intranet?

A. Authorised outsiders use networked computers to access information held on a server.

B. Employees use networked computers to access information held on a server.

C. A worldwide network of computers.

D. A collection of data organised to service many applications providing access to a wide variety of users.

Correct Answer: B

Question 5

Which of the following scenarios is an example of independence within the role of the finance function?

A. Financial accountant includes the corporation tax provision in the statutory accounts as calculated by the treasury department

B. Management accountant prepares variance reports based on comparing actual financial data with budgeted expectations.

C. Financial accountant updates the directors details in the statutory accounts based on the updates provided by the Company Secretary

D. Management accountant chooses to apply depreciation rates based on known replacement date of assets, rather than following accounting standards.

Correct Answer: B

Question 6

One of the roles of the finance function is to help deploy solutions. Which activity of the "information to impact" framework is this a part of?

A. Advise

B. Achieve

C. Analyse

D. Apply

Correct Answer: D

Question 7

Which one of the following structures primarily suits a nationwide business with three product lines; for example, soup, condiments and baby food?

A. Matrix

B. Divisional

C. Geographical

D. Functional

Correct Answer: B

Question 8

The growth and success of virtual teams have been a result of which THREE developments becoming available to organisations?

A. Safe transfer of funds electronically

B. Computer-aided design processes

C. Accurate systems of inventory management

D. Efficient broadband connections

E. Remote on-line meetings

F. Electronic information sharing

Correct Answer: D,E,F

Question 9

Which of the following is NOT a feature of a strategic level information system?

A. It handles information which is valid for the whole organisation.

B. It has high levels of uncertainty and subjectivity.

C. It helps middle managers to monitor and control.

D. It has a long term focus.

Correct Answer: C

Question 10

F manages a portfolio of clients, as do his colleagues. All income that is earned by them is pooled to cover costs and overheads and any remaining profits are split according to an agreed formula. F and his colleagues have joint and several liability in relation to the work they carry out on the organisation's behalf.
Which of the organisation types listed below best describes the organisation that F works for?

A. Company

B. Sole-trader

C. Partnership

D. Multinational

Correct Answer: C

Question 11

A boiler repair business uses an expert system in the form of a fault diagnostic system. What benefits does this give to the business?
Select ALL that apply.

A. Junior technicians are able to identify faults without a detailed knowledge.

B. The business is less reliant on the senior technician for solving problems.

C. The business saves money by needing less senior mechanics and repairing boilers quicker.

D. The system generates customer invoices quickly.

E. The system can be used for other purposes such as staff rotas.

F. Faults are diagnosed quicker so customer service is improved.

Correct Answer: A,B,C,F

Question 12

T Company has recently appointed J as Chief Data Officer
One of the responsibilities of the appointment is to ensure compliance with the General Data Protection Regulations (GDPR) in force in the jurisdiction J's first action was to carry out an internal audit of GDPR compliance Which THREE of the following audit findings are indicators that T Company is compliant with GDPR''

A. 98% of customer records were found to be accurate and up to date.

B. Customer data is deleted when no longer required.

C. Most of the staff were fully aware of their data protection responsibilities.

D. Customers are given the option of unsubscribing from marketing emails

E. Personal data is kept on a secure server, protected by a firewall

Correct Answer: A,B,E

Question 13

YZ Company has grown rapidly and has recently recruited a finance director to set up a more structured finance function. During this process care will be needed to ensure effective lines of communication between different disciplines within the whole function and to recognise the interdependencies.
Which of the following are examples of the interdependence of elements of the finance function?
Select ALL that apply.

A. Management reporting

B. Variance analysis reporting

C. Statutory financial reporting

D. Taxation management

E. Internal auditing

F. Budget management

Correct Answer: B,D,F

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CIMA Managing Finance in a Digital World (E1) Free Practice Test