Question 1

The process of making higher quality business decisions requires each of the following except:

Accepted Answer

Relying on preconceived notions can lead to biased and flawed decision-making. The other options are all important steps in making higher quality business decisions.

Question 2

Which of the following adjectives describes higher quality information?
I. Complete
II. Costly to develop
III. Relevant

Accepted Answer

Higher quality information should be complete and relevant, but the cost to develop it is not necessarily an indicator of its quality. Therefore, option C, which includes both complete and relevant, is the best choice.

Question 3

Higher-quality reports are more:
I. Relevant
II. Understandable
III. Available

Accepted Answer

Higher-quality reports are indeed more relevant, understandable, and available. Relevance ensures the information meets the needs of the users. Understandability makes the information comprehensible to those with a reasonable knowledge of the business and economic activities. Availability means the information is accessible to users when they need it.

Question 4

Biases may be:

Accepted Answer

Biases can be both intentional and unintentional, depending on the awareness and intent of the individual. Intentional biases are those that are knowingly held, while unintentional biases are those that individuals may not be consciously aware of.

Question 5

Managers can make higher-quality decisions by relying on all of the following except:

Accepted Answer

Relying on irrelevant information can lead to poor decision-making and lower the quality of decisions made. Therefore, managers should not rely on irrelevant information.

Question 6

Which of the following is the best example of an internal report that might come from an organization's information system?

Accepted Answer

An operating budget is an example of an internal report that might come from an organization's information system. It is a financial plan that outlines the revenues, expenses, and profits of an organization for a specific period of time. This budget is used by internal stakeholders and management to make decisions about resource allocation and to monitor financial performance. The other options listed are external reports that are typically submitted to government agencies or third-party payers.

Question 7

Uncertainties:

Accepted Answer

Uncertainties refer to issues that managers have doubts or uncertainties about, such as market conditions, future trends, and technological advancements. These uncertainties can have a significant impact on business decision making and can make it challenging to predict future outcomes. While accounting information is generally objective and reliable, uncertainties can still influence the interpretation and use of this information. Therefore, option A is the best choice.

Question 8

Animal Treats Company has 500 kg of liver-flavoured dog biscuits that are not selling well. The selling price of the biscuits could be reduced from $3.10 to $2.65 per kg. Or, they could be cheese-coated and sold for $4.25 per kg; the additional processing cost would be $0.40 per kg. Cheese-coated biscuits sell very well. Which alternative probably has less uncertainty concerning volume of sales?

Accepted Answer

Cheese-coated biscuits have been proven to sell well, so there is less uncertainty concerning volume of sales. Additionally, although there is an additional processing cost of $0.40 per kg, the selling price of $4.25 per kg is higher than the reduced price of liver-flavoured biscuits at $2.65 per kg, so the profit margin may be higher with the cheese-coated biscuits.

Question 9

Biases:

Accepted Answer

Biases can inhibit the ability to anticipate all future conditions, as they can limit one's perspective and narrow their focus. This can lead to overlooking important information or failing to consider alternative solutions. The other options are incorrect because biases can actually hinder the identification of relevant information and can also influence one's perception of what is irrelevant. Additionally, biases can greatly impact ethical decision making, as they can skew one's moral judgment and lead to unethical behavior.

Question 10

Financial statements are:

Accepted Answer

Financial statements are reports that are prepared by an organization's information system for external users such as investors, creditors and government agencies. These reports are used for decision-making purposes by these external users. They provide information on an organization's financial performance and position. While financial statements can also be used for internal decision-making purposes, their primary purpose is to provide information to external stakeholders.

Question 11

WestJet has several non-stop flights daily between Toronto and Vancouver. Which of the following is an uncertainty associated with this operation?

Accepted Answer

The average number of empty seats for flights next month is an uncertainty because it cannot be predicted with certainty how many passengers will book flights for the upcoming month, which could impact the number of available seats. The other options (A, B, and D) are either historical data or scheduled information that can be more accurately predicted.

Question 12

Which of the following is not true about information in an organization's databases?

Accepted Answer

While databases may contain valuable information, intellectual capital refers to the collective knowledge and abilities of an organization's employees, and may not necessarily be captured within a database.

Question 13

Higher quality decision making processes are less:

Accepted Answer

Higher quality decision making processes are less biased. This is because higher quality decision making processes involve gathering all the necessary information, considering all available options, and objectively weighing the pros and cons of each option, which reduces the impact of personal biases on the final decision.

Question 14

Which of the following statement about biases is true?

Accepted Answer

Biases can reduce the quality of decisions as they can lead managers to ignore valuable information or make decisions based on personal preferences rather than objective data. A is false as biases can affect both management and financial accounting information. B is false as managers can work to reduce their biases by being aware of them and implementing strategies to mitigate their effects. D is false as biased managers may be more likely to stick to their initial decision rather than exploring alternatives.

Question 15

Uncertainties and biases can affect:
I. Organizational vision
II. Core competencies
III. Operating plans

Accepted Answer

Uncertainties and biases can affect the organization's vision as it may cloud the leaders' judgment and ability to envision the future. The core competencies may also be affected as biases can make it difficult to recognize areas where the organization needs improvement. The operating plans also need to be adjusted based on uncertainties and biases to ensure that the organization is still moving towards its goals.

Question 16

Uncertainty may hinder a manager's ability to:
I. Adequately define a problem
II. Identify all potential solution options
III. Predict the outcome of various solution options

Accepted Answer

Uncertainty can make it difficult for managers to clearly define problems, identify all possible solutions, and accurately predict the outcomes of different solutions, affecting all aspects of decision-making.

Question 17

Information gathered outside the organization includes:

Accepted Answer

Information gathered outside the organization includes customer preferences, which can be vital in understanding market trends and developing successful products or services. The other choices, such as product design specifications, taxable income, and number of employees hired are typically gathered from within the organization itself.

Question 18

How does the use of sophisticated information systems affect managerial decision-making?

Accepted Answer

Sophisticated information systems can provide more accurate and comprehensive information, but it's up to the managers to use this information effectively. In some cases, managers may rely too heavily on the reports generated by these systems rather than using their own expertise and judgment to make decisions. This can lead to a lack of critical thinking and creativity in managerial decision-making processes.

Question 19

Biases:

Accepted Answer

Biases are preconceived notions that can affect decision making. Accounting information may be objective, but biases can still impact how managers interpret and use that information.

Question 20

Ramada Hotels operates hotels throughout Canada. Which of the following is the best example of a potential bias associated with its operations?

Accepted Answer

The statement assumes that most travelers are interested in conducting business, which may not be true for all guests. This bias could lead to a narrow focus on amenities and services catering to business travelers, potentially excluding or neglecting other types of guests.

Quiz 1: The Role of Accounting Information in Ethical Management Decision Making

The process of making higher quality business decisions requires each of the following except:

Which of the following adjectives describes higher quality information? I. Complete II. Costly to develop III. Relevant

Higher-quality reports are more: I. Relevant II. Understandable III. Available

Biases may be:

Managers can make higher-quality decisions by relying on all of the following except:

Which of the following is the best example of an internal report that might come from an organization's information system?

Uncertainties:

Biases:

Financial statements are:

WestJet has several non-stop flights daily between Toronto and Vancouver. Which of the following is an uncertainty associated with this operation?

Which of the following is not true about information in an organization's databases?

Higher quality decision making processes are less:

Which of the following statement about biases is true?

Uncertainties and biases can affect: I. Organizational vision II. Core competencies III. Operating plans

Uncertainty may hinder a manager's ability to: I. Adequately define a problem II. Identify all potential solution options III. Predict the outcome of various solution options

Information gathered outside the organization includes:

How does the use of sophisticated information systems affect managerial decision-making?

Biases:

Ramada Hotels operates hotels throughout Canada. Which of the following is the best example of a potential bias associated with its operations?