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ACCA Applied Knowledge · Management Accounting · Sources of data

Which of the following is a typical disadvantage of secondary data compared with primary data?

A key disadvantage of secondary data is that it may be out of date or collected for a different purpose, so definitions, timing or coverage may not match what the user needs. Its main advantages are low cost and speed.

  1. AIt is usually more costly and time-consuming to obtain
  2. BIt may be out of date or collected for a different purpose, so may not fit the need exactlyCorrect
  3. CIt can only be gathered through direct observation
  4. DIt always has a higher risk of non-response bias

Explanation

Secondary data was collected by others for other purposes, so definitions, timing or coverage may not match the user's needs. It is generally cheaper and quicker than primary data, so option A is the reverse of the truth. Non-response bias relates to surveys, which are primary collection.

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