Question 1

Behavior controls specify how something is to be done through policies, rules, standard operating procedures, and orders from a superior.

Accepted Answer

Behavior controls do indeed specify how something should be done through various means such as policies, rules, standard operating procedures, and orders from those in authority.

Question 2

The revenue center is measured in terms of efficiency.

Accepted Answer

The revenue center is measured in terms of generating revenue, not necessarily efficiency. Efficiency may be a factor in maximizing revenue, but it is not the primary measure of success for a revenue center.

Question 3

ROI stands for return on incentives.

Accepted Answer

ROI stands for return on investment, not return on incentives.

Question 4

ISO 2000 Standards Series, developed by the International Standards Association of Geneva, Switzerland, is an example of a behavior control.

Accepted Answer

The ISO 2000 Standards Series is not an example of behavior control. It is a set of standards related to IT service management. Behavior control refers to strategies, techniques or technologies used to monitor, regulate or manipulate behavior.

Question 5

Operating cash flow is also known as free cash flow.

Accepted Answer

Operating cash flow is not the same as free cash flow, as free cash flow also takes into account capital expenditures.

Question 6

One example of a steering control used by retail stores is the inventory turnover ratio, which shows how hard an investment in inventory is working.

Accepted Answer

The inventory turnover ratio is indeed a steering control used by retail stores to measure how efficiently they are managing their inventory. It shows how many times a company has sold and replaced its inventory over a period of time, indicating how quickly they are able to sell their inventory and generate revenue. By tracking this ratio, retailers can identify areas for improvement in their inventory management and adjust their strategies accordingly.

Question 7

Behavior, output, and input controls are all interchangeable.

Accepted Answer

Behavior, output, and input controls serve different purposes and are not interchangeable. Behavior controls are used to guide the actions of individuals, output controls are used to measure and evaluate results, and input controls are used to regulate inputs into a system or process.

Question 8

Unlike ROI, managers cannot manipulate the numbers of EVA.

Accepted Answer

EVA (Economic Value Added) calculations can also be subject to manipulation through the choice of capital charge rate, adjustments in capital employed, and operating income adjustments, similar to how ROI (Return on Investment) figures can be influenced by managerial decisions and accounting practices.

Question 9

The balanced scorecard combines financial measures that tell the results of actions already taken with operational measures on customer satisfaction, internal processes, and the corporation's innovation and improvement activities.

Accepted Answer

This is the definition of the balanced scorecard.

Question 10

Enterprise risk management is being adopted because of the increasing amount of environmental uncertainty that can affect an entire corporation.

Accepted Answer

Enterprise risk management helps corporations identify, assess, and manage risks that could impact their operations and financial performance. As business environments become more complex and uncertain, adopting an ERM framework can help organizations anticipate and address potential threats.

Question 11

One advantage of using ROI is that it is a single comprehensive figure that includes all revenues, costs, and expenses.

Accepted Answer

ROI (Return on Investment) is a single metric that takes into account all revenues and expenses, providing a comprehensive measure of profitability.

Question 12

The evaluation and control process ensures that the company is achieving what it set out to accomplish.

Accepted Answer

The evaluation and control process is an important part of the management process that helps ensure that the company is achieving its goals and objectives. It involves measuring the performance of the organization against predetermined standards, identifying any deviations from those standards, and taking corrective action as necessary. By doing so, the company can stay on track and make adjustments as needed to achieve its desired outcomes.

Question 13

Performance is the end result of activity.

Accepted Answer

Performance is the outcome or end result of an activity or task. It is the measure of how well an individual or group has accomplished their respective goals or objectives.

Question 14

Stickiness and eyeballs are two non-financial performance measures used by Internet business ventures.

Accepted Answer

Stickiness refers to the amount of time users spend on a website or app, while eyeballs refers to the number of visitors or views a website or app receives. Both are commonly used non-financial performance measures in Internet business ventures.

Question 15

ABC accounting allows accountants to charge costs more accurately than the traditional method because it allocates overhead far more precisely.

Accepted Answer

Activity-based costing (ABC) is a more precise method of cost accounting that allocates overhead costs to specific activities and then assigns those costs only to the products, services or customers that use those activities. This allows for more accurate cost calculations than the traditional method of dividing overhead costs equally among all products or services.

Question 16

One of the obstacles to effective control is the difficulty in developing appropriate measures of important activities and outputs.

Accepted Answer

Developing appropriate measures of important activities and outputs can be a challenge for organizations, which can hinder effective control.

Question 17

Evaluation and control information consists only of performance data.

Accepted Answer

Evaluation and control information includes not only performance data, but also analysis and interpretation of the data, as well as plans for making any necessary adjustments or improvements based on the findings.

Question 18

Management audits have been developed to evaluate activities such as corporate social responsibility, functional areas such as the marketing department, and divisions such as the international division.

Accepted Answer

Management audits are commonly used to evaluate various aspects of an organization, including corporate social responsibility, functional areas such as marketing, and divisions such as international.

Question 19

EVA will never replace ROI as the standard performance measure.

Accepted Answer

EVA (Economic Value Added) is often used as a complement to ROI (Return on Investment) as a performance measure, but it is unlikely to completely replace ROI as the standard performance measure. This is because ROI is a more widely recognized and established measure with a long history of use, and it is more straightforward to calculate and understand than EVA. Furthermore, some companies may still prioritize other performance measures such as revenue growth, market share, or customer satisfaction over ROI and EVA. Therefore, while EVA may be a useful tool for measuring business performance, it is unlikely to completely replace ROI as the standard measure.

Question 20

ACB is an accounting method for allocating direct and fixed costs to individual products.

Accepted Answer

ACB (Activity-Based Costing) is a method for allocating indirect costs to products based on the activities that generate those costs, not direct and fixed costs.

Quiz 11: Evaluation and Control