Question 1

The task of external auditors is to verify that the organization, in preparing its financial statements, followed generally accepted accounting principles.

Accepted Answer

External auditors are certified public accountants (CPAs) who work for an accounting firm that is independent of the organization being audited.Their task is to verify that the organization, in preparing its financial statements and in determining its assets and liabilities, followed generally accepted accounting principles.

Question 2

The two core principles of TQM are people orientation and improvement orientation.

Accepted Answer

The two core principles of TQM are: (1) people orientation, in which everyone involved with the organization should focus on delivering value to customers and (2) improvement orientation, in which everyone should work on continuously improving the work processes.

Question 3

The RATER scale enables customers to rate the quality of manufactured goods along five dimensions.

Accepted Answer

The RATER scale enables customers to rate the quality of a service along the five dimensions of reliability, assurance, tangibles, empathy, and responsiveness (abbreviated RATER), each on a scale from 1 (for very poor) to 10 (for very good).

Question 4

A variable budget allows the allocation of resources to vary in proportion with various levels of activity.

Accepted Answer

A variable budget allows the allocation of resources to vary in proportion with various levels of activity.That is, the budget can be adjusted over time to accommodate pertinent changes in the environment.

Question 5

The practice of evaluating financial ratios to determine an organization's financial health is called viability analysis.

Accepted Answer

Managers often use ratio analysis, the practice of evaluating financial ratios, to determine an organization's financial health.

Question 6

TQM assumes that, if given empowerment, employees will focus on strategic goal setting.

Accepted Answer

The people orientation of TQM has several assumptions, one of which is that people will focus on quality if given empowerment.The reasoning here is that the people actually involved with the product or service are in the best position to detect opportunities for quality improvements.

Question 7

An internal audit is a verification of an organization's financial accounts and statements by the organization's own professional staff.

Accepted Answer

An internal audit is a verification of an organization's financial accounts and statements by the organization's own professional staff.

Question 8

Incremental budgeting requires setting up many budgets based on short periods, which together make up the full resource requirement.

Accepted Answer

Incremental budgeting allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.

Question 9

In Deming's PDCA cycle, "A" stands for "act," which means to implement the change or make a small scale test.

Accepted Answer

The PDCA cycle is a plan-do-check-act cycle using observed data for continuous improvement of operations ."Do" means to implement the change or make a small-scale test.

Question 10

A fixed budget does not allow for adjustment over time except when there are pertinent changes in the environment.

Accepted Answer

A fixed budget allocates resources on the basis of a single estimate of costs.That is, there is only one set of expenses; the budget does not allow for adjustment over time.A variable budget allows the allocation of resources to vary in proportion with various levels of activity.That is, the budget can be adjusted over time to accommodate pertinent changes in the environment.

Question 11

An expense budget anticipates investment in major assets such as land, buildings, and major equipment.

Accepted Answer

A capital expenditures budget anticipates investments in major assets such as land, buildings, and major equipment.

Question 12

A balance sheet summarizes an organization's overall financial worth at a specific point in time.

Accepted Answer

A balance sheet summarizes an organization's overall financial worth, or its assets and liabilities, at a specific point in time.

Question 13

A cash flow statement summarizes an organization's financial results over a specified period of time.

Accepted Answer

The income statement summarizes an organization's financial results, its revenues and expenses, over a specified period of time, such as a quarter or a year.

Question 14

A principle of Deming management is that quality should be aimed at the needs of the worker.

Accepted Answer

One of Deming's principles is that quality should be aimed at the needs of the consumer."The consumer is the most important part of the production line," Deming wrote.Thus, the efforts of individual workers in providing the product or service should be directed toward meeting the needs and expectations of the ultimate user.

Question 15

A formal financial projection is known as a budget.

Accepted Answer

A budget is a formal financial projection.It states an organization's planned activities for a given period of time in quantitative terms, such as dollars, hours, or number of products.

Question 16

The most popular form of budgeting is known as zero-based budgeting.

Accepted Answer

Managers can take essentially two budget-planning approaches.One of them, zero-based budgeting (ZBB), which forces each department to start from zero in projecting funding needs, is no longer favored.Incremental budgeting is mainly used now.

Question 17

On her first visit to a new doctor's office, Melanie noted the fine furniture in the lobby and the crisp white coats that each of the staff wore.She was judging the tangibles dimension of the RATER scale.

Accepted Answer

The RATER scale enables customers to rate the quality of a service along the five dimensions of reliability, assurance, tangibles, empathy, and responsiveness (abbreviated RATER), each on a scale from 1 (for very poor) to 10 (for very good).The dimension known as tangibles pertains to judging physical facilities, equipment, and the appearance of personnel.

Question 18

TQM assumes that it's better to make small improvement all the time.

Accepted Answer

The improvement orientation of TQM has several assumptions, one of which is that it's better to do small improvements all the time.This is the assumption that continuous improvement must be an everyday matter, that no improvement is too small, and that there must be an ongoing effort to make things better a little bit at a time all the time.

Question 19

One difficulty with incremental budgets is that they tend to lock departments into stable spending arrangements.

Accepted Answer

One difficulty is that incremental budgets tend to lock departments into stable spending arrangements; they are not flexible in meeting environmental demands.

Question 20

Informal feedback systems interfere with effective measurement.

Accepted Answer

Managers put too much trust in informal feedback systems.Managers tend to overrate feedback mechanisms such as customer complaints or sales-force criticisms about products.But these mechanisms aren't necessarily accurate.

Quiz 16: Control Systems and Quality Management: Techniques for Enhancing Organizational Effectiveness

The task of external auditors is to verify that the organization, in preparing its financial statements, followed generally accepted accounting principles.

The two core principles of TQM are people orientation and improvement orientation.

The RATER scale enables customers to rate the quality of manufactured goods along five dimensions.

A variable budget allows the allocation of resources to vary in proportion with various levels of activity.

The practice of evaluating financial ratios to determine an organization's financial health is called viability analysis.

TQM assumes that, if given empowerment, employees will focus on strategic goal setting.

An internal audit is a verification of an organization's financial accounts and statements by the organization's own professional staff.

Incremental budgeting requires setting up many budgets based on short periods, which together make up the full resource requirement.

In Deming's PDCA cycle, "A" stands for "act," which means to implement the change or make a small scale test.

A fixed budget does not allow for adjustment over time except when there are pertinent changes in the environment.

An expense budget anticipates investment in major assets such as land, buildings, and major equipment.

A balance sheet summarizes an organization's overall financial worth at a specific point in time.

A cash flow statement summarizes an organization's financial results over a specified period of time.

A principle of Deming management is that quality should be aimed at the needs of the worker.

A formal financial projection is known as a budget.

The most popular form of budgeting is known as zero-based budgeting.

On her first visit to a new doctor's office, Melanie noted the fine furniture in the lobby and the crisp white coats that each of the staff wore.She was judging the tangibles dimension of the RATER scale.

TQM assumes that it's better to make small improvement all the time.

One difficulty with incremental budgets is that they tend to lock departments into stable spending arrangements.

Informal feedback systems interfere with effective measurement.