Deck 28: The Balanced Scorecard and Corporate Social Responsibility

Question 1

It is important to gather meaningful accounting metrics to assess how well employees or units within a company meet the company's goals and objectives.

Answer 1

True

Question 2

It is important to gather as many accounting metrics as possible because they have intrinsic value and do not need a context in which to be understood.

Answer 2

False

Question 3

Performance measurement systems are used to assess how well a company is performing relative to the goals FASB sets for the company.

Answer 3

False

Question 4

Evaluating employee performance and making strategic decisions are two examples of how managerial accounting information is used.

Question 5

Performance measurement systems use externally imposed benchmarks of the competitive landscape to assess internal performance.

Question 6

Performance measurement systems use measures of current performance to assess how well a company is performing toward meeting its goals and objectives.

Question 7

Material price variances are examples of metrics used for measuring a purchasing department's performance.

Question 8

Material price variances are examples of metrics used for measuring a sales department's performance.

Question 9

Accounting metrics, such as operating income, make business decision-making processes more complex.

Question 10

The balanced scorecard is a marginally effective strategic performance management system.

Question 11

Strategic performance measurement systems define and link strategic objectives to the performance metrics of a company.

Question 12

Accounting metrics, such as cash flow, are often used to simplify the business decision-making process.

Question 13

Strategic performance measurement systems define and link strategic objectives to the external financial reports of a company.

Question 14

Performance measurement systems are used to prepare tax information needed by the IRS to assess a company's taxable income.

Question 15

Performance measurement systems are used to assess how well a company is performing toward meeting its own goals and objectives.

Question 16

Operating income and cash flow are examples of metrics used to assess a company's financial condition.

Question 17

James, an accountant at Forta Company, is preparing an income statement at the end of the year. It will be included in the company's annual report to be released to the public. This is an example of the managerial accounting function at Forta.

Question 18

Operating income and cash flow are examples of metrics used to assess quality control.

Question 19

Strategic performance measurement systems are commonly used by large companies around the world.

Question 20

James, an accountant at Forta Company, is preparing a report showing the production shift data for the previous day's production. This report will be shared with the production manager, Julia. This is an example of the role of managerial accounting at work.

Question 21

Performance targets may be linked to employee incentives such as bonuses and additional days off.

Question 22

Sometimes a strategy map is referred to as a value chain.

Question 23

Mila is helping to set performance targets for her company, Urban Supply. The target of increasing the company's online customer satisfaction rate by 1% in the next quarter is an example of a performance target focused on the customer perspective of the balance scorecard.

Question 24

Cassie works at LoftCo, Inc., in the Employee Training Department where her work is focused on the learning and growth perspective of the balanced scorecard performance management system. While it is critical that the work in her performance area is linked to at least one strategic objective within the company, it is not necessary for performance metrics to be tied to the strategic objective.

Question 25

The balanced scorecard is named for its view of company performance focusing only on financial measures.

Question 26

The balanced scorecard has four performance perspectives: financial, customer, learning and growth, and strategic.

Question 27

A strategy map links the four perspectives of the BSC with strategic objectives, strategic initiatives, performance metrics, and performance targets.

Question 28

Mason works at LoftCo, Inc., in an operations department focused on the internal processes perspective of the balanced scorecard performance management system. It is critical that the work in this performance area is linked to at least one strategic objective within the company.

Question 29

The balanced scorecard focuses on lagging indicators such as actual sales volume rather than including leading indicators such as customer satisfaction.

Question 30

Strategic initiatives are interchangeable with strategic objectives.

Question 31

The balanced scorecard has five performance perspectives: financial, learning and growth, internal processes, customer, and supply chain.

Question 32

Miguel works at LoftCo, Inc., and has been asked to help lead the development of the company's new balanced scorecard. He and his multifunctional team developed strategic objectives and performance metrics for each of the four perspectives. This work constitutes the complete set of steps in developing a BSC performance management system.

Question 33

Jerome works at LoftCo, Inc., in research and development. The performance measures he gathers include assessing progress towards developing a better form of biodegradable plastic packaging. Jerome is focused on the internal processes perspective of the balanced scorecard performance management system.

Question 34

Mason works at LoftCo, Inc., studying and improving operational efficiencies. The performance measures he gathers include determining the number of defective units produced in a week. Mason is focused on the internal processes perspective of the balanced scorecard performance management system.

Question 35

Performance in the customer perspective of the balanced scorecard often focuses on the ability to obtain customers.

Question 36

Sometimes a strategy map is referred to as a supply chain map.

Question 37

Cassie works at LoftCo, Inc., studying effective ways to retain the company's current customers. The performance measures she gathers include determining the number of customer returns each week. Cassie is focused on the internal processes perspective of the balanced scorecard performance management system.

Question 38

Performance in the financial perspective of the balanced scorecard focuses on satisfying customers.

Question 39

One of the objectives of the four balanced scorecard performance perspectives is to help management focus on looking beyond typical financial measures of performance.

Question 40

The balanced scorecard incorporates only qualitative performance metrics.

Question 41

Cody is a manager at Valvco and is leading a team to create the measure map in the company's new BSC initiative. Cody is correct in sharing with his colleagues that a measure map provides a means for verifying the expectations of how strategic objectives affect one another.

Question 42

In the strategic learning process, Carli is trying to understand why the increase in the customer satisfaction rating at her company did not generate the expected increase in sales for the last quarter. It would be logical for her simply to conclude that customer satisfaction has nothing to do with increased sales.

Question 43

Falco Industries is adopting a balanced scorecard. It would be a positive outcome of the process if Falco's employees fully embraced surrogation of the metrics.

Question 44

Corporate social responsibility efforts do not ever require significant capital investments.

Question 45

The budgeted income statement and balance sheet are the most important components of a company's strategy map.

Question 46

Corporate social responsibility is best described as the efforts a company takes to increase corporate profits.

Question 47

Corporate social responsibility focuses not only on the impact of a company's operations on society but also on improving social well-being within and outside of the firm.

Question 48

A measure map is different from a strategy map because it shows the expected relationships among performance metrics based on the strategy map.

Question 49

Corporate social responsibility capital investment proposals can be analyzed using a variety of managerial accounting methods.

Question 50

Corporate social responsibility efforts may be linked to the four perspectives of the balanced scorecard in a sustainability balanced scorecard.

Question 51

Corporate social responsibility efforts may require significant capital investments.

Question 52

Jace is an executive at a large but decentralized corporation that uses the balanced scorecard. It would be reasonable for her to suggest using scorecard cascading to help her large company more effectively ensure that individuals throughout the company support its overriding strategy.

Question 53

Cody is a manager at Valvco and is creating a measure map with his supervisor. Cody can be confident in telling his boss that if customer satisfaction ratings predict sales, then customer satisfaction is the lagging indicator and sales is the leading indicator.

Question 54

Certain corporate social responsibility efforts, such as protecting the environment for future generations, are also referred to as sustainability efforts.

Question 55

Sometimes a strategy map is referred to as a measure map.

Question 56

Carli is a manager at PetsCo and is leading the development of the BSC for the company. She is correct in explaining to her development team that management may need to adjust its strategic objectives if their expectations regarding relationships between several strategic objectives are not supported by statistical analysis.

Question 57

A measure map is different from a strategy map because it shows which metrics are leading indicators and which metrics are lagging indicators.

Question 58

Cody is a manager at Valvco and is creating a measure map. Cody is correct in assessing that if median training hours per employee predict the improvement of delivery times to the customer, then delivery times is the lagging indicator and median training hours per employee is the leading indicator.

Question 59

Ben-Hal Mining, a coal mining company, invests significant funds in land, soil, and water reclamation and conservation projects in every community impacted by its operations. This is an example of a corporate social responsibility objective requiring an extensive capital investment by Ben-Hal Mining.

Question 60

Corporate social responsibility activities focus only on local issues.

Question 61

Which of the following is not one of the elements of the balanced scorecard?

A)strategic initiatives
B)cost system
C)performance targets
D)strategy maps

Question 62

Nonfinancial performance measures in the balanced scorecard such as customer satisfaction are often _____ of future financial performance.

A)leading indicators
B)lagging indicators
C)poor indicators
D)not considered an indicator

Question 63

Carolina, the accountant for Duke Manufacturing, tells Jacob, who works in customer service for Duke, that that their company's customer satisfaction rating predicts sales revenue in dollars. Carolina's comment indicates that sales revenue is

A)a leading indicator
B)a lagging indicator
C)both a leading and a lagging indicator
D)a nonfinancial metric

Question 64

Which of the following is not one of the elements of the balanced scorecard?

A)strategic plan
B)performance perspectives
C)strategic objectives
D)performance metrics

Question 65

Which of the following best describes a strategic performance measurement system?

A)A strategic performance measurement system defines and links strategic objectives to the stock price of a company.
B)A strategic performance measurement system defines and links strategic objectives to the performance metrics of a company.
C)A strategic performance measurement system defines and links strategic objectives to the standard cost system of a company.
D)A strategic performance measurement system defines and links strategic objectives to the bond rating of the company.

Question 66

AnaCarolina and Jaco, executive managers at Duke Manufacturing, are tasked with determining appropriate performance metrics for the customer perspective of Duke's balanced scorecard. Which of the following is the best metric for this situation?

A)return on investment
B)operating throughout
C)material price variance
D)number of returns due to incorrect products shipped in response to orders

Question 67

Waterfield Company is looking for a way to help its executive managers assess how the three divisions within the company are meeting the company's overall goals and objectives. The company is looking for a(n)

A)activity-based accounting system
B)product costing system
C)performance measurement system
D)standard cost system

Question 68

Waterfield Company has three decentralized segments. Executive managers are looking for a way to measure the performance of each segment. Which of the following metrics might be used for this purpose?

A)the operating cash flows for the entire company
B)the return on investment of each segment
C)the number of training sessions provided to employees in each segment
D)the material quantity variance in each segment

Question 69

Carolina, the accountant for Duke Manufacturing, tells Jacob, who works in customer service for Duke, that that their company's customer satisfaction rating predicts sales revenue in dollars. Carolina's comment indicates that the customer satisfaction rating is

A)a leading indicator
B)a lagging indicator
C)both a leading and a lagging indicator
D)a nonfinancial metric

Question 70

Waterfield Company has three decentralized segments. Executive managers are looking for a way to measure the performance of each segment. Which of the following metrics might be used for this purpose?

A)the operating cash flows for the entire company
B)the residual income of each segment
C)the number of training sessions provided to employees in each segment
D)the material quantity variance in each segment

Question 71

Waterfield Company is looking for a way to help its executive managers assess how its three divisions are meeting the company's goals and objectives for financial performance. Which of the following metrics might be used for this purpose?

A)operating income and cash flows
B)customer satisfaction rating and the number of customer returns
C)the amount of time employees spend in training and the number of training sessions provided
D)the material price variance and the material quantity variance

Question 72

AnaCarolina and Jaco work at Duke Manufacturing, and they are tasked with determining appropriate performance metrics for the internal processes perspective of Duke's balanced scorecard. Which of the following is the best metric for this situation?

A)operating income
B)defective units produced
C)sales revenue
D)customer satisfaction rating

Question 73

Bekah and Rafael, supervisors in the Human Resources Department at James Manufacturing, are tasked with determining appropriate performance metrics for the learning and growth perspective of their company's balanced scorecard. Which of the following is the best metric for this situation?

A)return on investment
B)operating throughout
C)material price variance
D)hours of employee training offered each quarter

Question 74

A company's balanced scorecard may include

A)only leading indicators
B)only lagging indicators
C)both leading and lagging indicators
D)neither leading nor lagging indicators

Question 75

Which of the following is not one of the four performance perspectives included in the balanced scorecard?

A)financial
B)internal processes
C)research and development
D)customer

Question 76

AnaCarolina and Jaco, accountants for Duke Manufacturing, are tasked with determining appropriate performance metrics for the financial perspective of Duke's balanced scorecard. Which of the following is the best metric for this situation?

A)return on investment
B)operating throughout
C)material price variance
D)customer satisfaction rating

Question 77

A company's balanced scorecard may include

A)only nonfinancial metrics
B)only financial metrics
C)both nonfinancial and financial metrics
D)neither nonfinancial nor financial metrics

Question 78

Which of the following is an example of a strategic performance measurement system?

A)product costing system
B)lean management system
C)standard cost system
D)balanced scorecard

Question 79

Waterfield Company is looking for a way to help its executive managers assess how its three divisions are meeting the company's goals and objectives for the performance of its purchasing department. Which of the following metrics might be used for this purpose?

A)operating income
B)customer satisfaction rating
C)the amount of time employees spend in training
D)the material price variance

Question 80

Which of the following is the best-known strategic performance measurement system?

A)product costing system
B)lean management system
C)standard cost system
D)balanced scorecard