Chapter 2

SOURCES OF DATA
1. Introduction
The management accountant needs data in order to be able to process it into information.
2. Primary and secondary sources of data
Primary data are data that have been collected for the specific purpose.

Secondary data are data that have been collected for some other purpose but which we then
use for our purposes.
3. Internal and external sources data
Internal data are data collected from our own records. These are the main source of primary
data.
External data are data collected from elsewhere e.g. the internet, government statistics, and
financial newspapers. These will be secondary data.
4. Sampling
It is common to collect data from a sample rather than from the whole population.
Data from the sample are used as representative of the whole population.
5. Sampling methods
Random sampling
Every item in the population has an equal chance of being selected (sampling frame)
Systematic sampling (quasi-random)
Select (for example) every 10th item in the population
stratified sampling (quasi-random)
Every element of one sub-section of the population is selected.
Split the population into groups, and then select at random. For example, if 60% of the
population are women and 40% are men, then 60% of the sample should be women
and 40% men.
Multistage sampling (quasi-random)
For example, suppose a company has several thousand purchase invoices filed, filling
20 files. Take a random sample of (say) 5 files, and then a random sample of (say) 20
invoices from each of these files.
Cluster sampling (not random)
For example, suppose a company has 100 offices through the country, each issuing
sales invoices.
Take a random sample of (say) 5 offices and check every invoice at each of these
offices.
Quota sampling (not random)
All people are interviewed up to a certain quota.
Suppose the population is 60% women and 40% men, and that we want to question a
sample of 200 total. Decide on a quota of 120 women (60%) and 80 men (40%) and
then stop people as they appear until we have the required number of each.

Qu.1
A sample of people is taken with the same proportion of individuals in separate age
bands as in the population as a whole.
This is an example of which type of sampling?
Systematic sampling
Random sampling
Stratified sampling
Cluster sampling
Ans c
Qu.2
Which of the following statements about stratified sampling is true?

The sample will not be representative

The structure of the sample will not reflect that of the population
Knowledge is needed of each item of the population
The sample is chosen entirely at random
Ans c
Qu.3
Which of the following statements are true? (Select all that apply)

Population data are data arising as a result of investigating a group of people

or objects.
Secondary data are data collected especially for a specific purpose.
Continuous data can take on any value
Quantitative data cannot be measured.

Ans B and D are incorrect it is primary data (not secondary data) that are data
collected for a specific purpose. Quantitative data can be measured.

Note: discrete data takes only fixed value