Question 1

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed is known as _____ control.
A) feedback
B) concurrent
C) accounting
D) budget
E) feedforward

Accepted Answer

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed is known as concurrent control.

Question 2

The _____ states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard.
A) return on investment
B) audit
C) myopia
D) principle of exception
E) debt-equity ratio

Accepted Answer

The managerial principle of exception states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard.

Question 3

Max Inc. has started a new system of allocating costs according to what their employees do, rather than what the company spends. For example, labor expenses are allocated to employee tasks rather than salary and benefits. This practice is referred to as:
A) cost accounting.
B) accounting auditing.
C) task accounting.
D) activity-based costing.
E) allocation costing.

Accepted Answer

Activity-based costing is a method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities.

Question 4

At Precision Instruments Corp., a rule has been made instructing all assembly workers to arrive early for their shift in order to wear specialized gear because the products are very sensitive to external particles. These products are assembled in a controlled environment. This requirement reflects _______ control.
A) feedback
B) specialist
C) feedforward
D) operator
E) concurrent

Accepted Answer

Feedforward control takes place before operations begin and includes policies, procedures, and rules designed to ensure that planned activities are carried out properly.

Question 5

Which type of control is future oriented and aims to prevent problems before they arise?
A) Feedback control
B) Specialist control
C) Feedforward control
D) Operator control
E) Concurrent control

Accepted Answer

Feedforward control is future oriented; its aim is to prevent problems before they arise.

Question 6

_____ is the process of comparing a firm's practices and technologies with those of other organizations.
A) Benchmarking
B) Budgeting
C) Six Sigma
D) Management audit
E) Feedforward control

Accepted Answer

Benchmarking is the process of comparing a firm's practices and technologies with those of other organizations.

Question 7

The last step in a typical control system is:
A) taking action to correct problems.
B) setting performance standards.
C) measuring performance.
D) comparing performance against the standards.
E) revising standards.

Accepted Answer

The last step in a typical control system is taking action to control problems and reinforce successes.

Question 8

Kate is the financial manager at Flavors Inc., a lollipop manufacturer. One of her duties is to make a budget that shows the anticipated receipts and expenditures of the company. The budget also shows the amount of working capital available and the extent to which outside financing may be required. Kate makes this budget after all other budget estimates have been completed. Which of the following types of budget is Kate currently working on?
A) Master budget
B) Cash budget
C) Cost budget
D) Production budget
E) Sales budget

Accepted Answer

The cash budget is essential to every business. It should be prepared after all other budget estimates are completed. The cash budget shows the anticipated receipts and expenditures, the amount of working capital available, the extent to which outside financing may be required, and the periods and amounts of cash available.

Question 9

Which of the following is the second stage of budgetary control?
A) Responding appropriately
B) Performing budgetary operations
C) Comparing Six Sigma data
D) Establishing expectancies
E) Taking action

Accepted Answer

According to exhibit 14.4, the second stage of budgetary control is performing budgetary operations.

Question 10

Which of the following is the first step in a typical control system?
A) Setting performance standards
B) Comparing performance against the standards
C) Taking action to correct problems
D) Revising standards
E) Measuring performance

Accepted Answer

The first step in a typical control system is setting performance standards.

Question 11

An evaluation conducted by one organization of another organization is referred to as a(n):
A) external audit.
B) market control.
C) clan control.
D) budget.
E) activity-based costing.

Accepted Answer

An evaluation conducted by one organization of another organization, such as a CPA firm, is referred to as an external audit.

Question 12

The level of expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed is referred to as a(n):
A) liability.
B) balance sheet.
C) standard.
D) asset.
E) audit.

Accepted Answer

Standard refers to expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed.

Question 13

Which of the following is a use of external audits?
A) Evaluating financial stability
B) Evaluating production efficiency
C) Evaluating sales effectiveness
D) Identifying possible mergers or acquisitions
E) Identifying earnings potential

Accepted Answer

An external audit investigates other organizations for possible merger or acquisition, determines the soundness of a company that will be used as a major supplier, or discovers the strengths and weaknesses of a competitor to maintain or better exploit the competitive advantage of the investigating organization. External audits provide essential feedback control when they identify legal and ethical lapses that could harm the organization and its reputation.

Question 14

Which of the following budgets is used for areas of the organization that incur expenses but no revenue?
A) Sales budget
B) Production budget
C) Cost budget
D) Cash budget
E) Master budget

Accepted Answer

The cost budget is used for areas of the organization that incur expenses but no revenue, such as human resources and other support departments.

Question 15

Which of the following statements is true regarding Six Sigma?
A) The system was developed by General Electric.
B) It is designed to choose the correct organizational process for a job.
C) The lower the sigma number, the lower the level of defects.
D) It indicates how often defects in a process are likely to occur.
E) It always improves the bottom line.

Accepted Answer

Six Sigma indicates how often defects in a process are likely to occur.

Question 16

Assessing the planning, organizing, leading, and controlling efforts of one's own organization is the essential function of:
A) strategic audit.
B) feedforward control.
C) feedback control.
D) external audit.
E) internal audit.

Accepted Answer

Internal audit refers to a periodic assessment of a company's own planning, organizing, leading, and controlling processes.

Question 17

The Six Sigma approach is based on _____ that contribute(s) to customer satisfaction.
A) statistical analysis
B) budgetary control
C) a strategic vision
D) management audits
E) an increased customer base

Accepted Answer

The six sigma approach is based on an intense statistical analysis of business processes that contribute to customer satisfaction.

Question 18

An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n):
A) standard.
B) management audit.
C) innovation catalyst.
D) budget.
E) profit and loss statement.

Accepted Answer

Management audit refers to an evaluation of the effectiveness and efficiency of various systems within an organization.

Question 19

Which type of bureaucratic control takes place while plans are being carried out?
A) Feedback control
B) Specialist control
C) Preliminary control
D) Feedforward control
E) Concurrent control

Accepted Answer

Concurrent control takes place while plans are being carried out. It includes directing, monitoring, and fine-tuning activities as they occur.

Question 20

Jennifer, a manager, is in charge of production at Nanosystems, Inc. Part of her job is to ensure that the components for surgical devices are extremely accurate. In fact, it is important that they are perfectly produced. When Jennifer concentrates on the significant deviations from established standards, she is using the:
A) balance sheet.
B) management myopia.
C) employment relationship.
D) principle of exception.
E) balance scorecard.

Accepted Answer

The managerial principle of exception states that control is enhanced by concentrating on the exceptions to or significant deviations from the expected result or standard.

Quiz 14: Managing Control

The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed is known as _____ control.

The _____ states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard.

Max Inc. has started a new system of allocating costs according to what their employees do, rather than what the company spends. For example, labor expenses are allocated to employee tasks rather than salary and benefits. This practice is referred to as:

Which type of control is future oriented and aims to prevent problems before they arise?

_____ is the process of comparing a firm's practices and technologies with those of other organizations.

The last step in a typical control system is:

Which of the following is the second stage of budgetary control?

Which of the following is the first step in a typical control system?

An evaluation conducted by one organization of another organization is referred to as a(n) :

The level of expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed is referred to as a(n) :

Which of the following is a use of external audits?

Which of the following budgets is used for areas of the organization that incur expenses but no revenue?

Which of the following statements is true regarding Six Sigma?

Assessing the planning, organizing, leading, and controlling efforts of one's own organization is the essential function of:

The Six Sigma approach is based on _____ that contribute(s) to customer satisfaction.

An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n) :

Which type of bureaucratic control takes place while plans are being carried out?