Question 1

_____ are calculations typically used to track a business's liquidity, efficiency, and profitability over time compared to other businesses in its industry.
A) Market basket analyses
B) Cash flow analyses
C) Financial ratios
D) Balance sheets

Accepted Answer

Financial ratios are calculations that are used to evaluate a company's financial performance and are compared to those of other firms in the same industry. Ratios can provide insights into a company's liquidity, efficiency, profitability, and financial stability. Cash flow analyses and balance sheets are also important financial statements, but they do not directly compare a business's performance to that of other companies in its industry. Market basket analyses are used to analyze consumer purchasing patterns and are not directly related to corporate financial performance.

Question 2

Argon Inc., a textile company, installed new equipment in its factory two years ago. This increased the production rate. The chief executive officer of Argon wants to determine the current assets and liabilities of the company. The financial report that can provide this information is the _____.
A) cash flow statement
B) financial ratio report
C) balance sheet
D) income statement

Accepted Answer

The balance sheet provides information regarding a company's current assets and liabilities, including inventory, cash, accounts receivable, and accounts payable. The cash flow statement would provide information related to cash inflows and outflows, while the income statement would provide information regarding the company's revenues and expenses. The financial ratio report would provide information on the company's financial performance in terms of profitability, liquidity, and solvency, but may not provide specific details on current assets and liabilities.

Question 3

Which of the following is a difference between balance sheets and income statements?
A) Balance sheets provide a snapshot of a company's financial position at a particular time, whereas income statements show what has happened to an organization's income, expenses, and net profit over a period of time.
B) Balance sheets are also known as profit and loss statements, whereas income statements are also known as statements of financial position.
C) Balance sheets are used to track a business's liquidity, efficiency, and profitability over time compared to other businesses in its industry, whereas income statements are quantitative plans through which managers decide how to allocate available money to best accomplish company goals.
D) Balance sheets require managers to justify every expenditure every year, whereas income statements do not require any such justifications.

Accepted Answer

Balance sheets and income statements serve different purposes. Balance sheets provide a snapshot of a company's financial position at a particular time, whereas income statements show what has happened to an organization's income, expenses, and net profit over a period of time. Balance sheets are used to track a company's liquidity, efficiency, and profitability over time compared to other businesses in its industry, while income statements are used to make decisions on how to allocate available money to accomplish company goals. The other choices are incorrect as they do not accurately describe the differences between balance sheets and income statements.

Question 4

_____ are accounting statements that show what has happened to an organization's revenue, expenses, and net profit over a period of time.
A) Statements of financial position
B) Balance sheets
C) Statements of stakeholders' equity
D) Income statements

Accepted Answer

Income statements, also known as profit and loss statements, provide a summary of the organization's revenues, expenses, and net profit or loss over a specific period of time, such as a month or a year. This statement helps to assess the financial performance of the organization by revealing the amount of profit or loss generated by its operations.

Question 5

The accountants at Global Finances can take work home for as many days as they like as long as their spreadsheets are up to date and accurate. This scenario illustrates that Global Finances uses _____.
A) self-control
B) concertive control
C) bureaucratic control
D) normative control

Accepted Answer

The scenario indicates that accountants are allowed to take work home as long as they exercise self-control and ensure their spreadsheets are up to date and accurate. This implies that there is no external control mechanism in place, and individuals are responsible for regulating their own behavior. Therefore, the organization uses self-control as a form of control. The other options, concertive control, bureaucratic control, and normative control, entail more structured and formal control mechanisms than self-control.

Question 6

Orlando is a manager and sales coordinator at ETC Merchandise. His team members have the liberty to work from home or office, just like Orlando does, as long as they meet the sales targets every month. Orlando allows them this liberty because he knows that they are highly focused and dedicated like him, and that they monitor their own progress and work effectiveness, just like he does for himself. This scenario illustrates the concept of _____.
A) self-control
B) concertive control
C) bureaucratic control
D) normative control

Accepted Answer

Orlando's approach illustrates self-control, where individuals monitor and regulate their own behavior and performance without external supervision.

Question 7

_____ occurs when performance improvement is attained in one part of an organization but only at the expense of decreased performance in another part.
A) Suboptimization
B) Process gain
C) Organizational balance
D) Optimization

Accepted Answer

Suboptimization occurs when one part of an organization achieves improved performance but this improvement comes at the expense of reduced performance in another part of the organization. This can occur when managers focus too narrowly on their own area of responsibility without considering the impact of their decisions on the organization as a whole.

Question 8

The chief financial officer of Cherry Toys wants to determine the losses incurred by the company's sales team. The financial report she should look at is the _____.
A) income statement
B) financial ratio report
C) balance sheet
D) annual budget report

Accepted Answer

The income statement shows the company's revenue, expenses, and net income or loss for a specific period. The CFO can use this report to determine if the sales team's performance has affected the company's profitability.

Question 9

As long as the graphic designers at Spiral Animation deliver five designs every week, they are allowed to make their own schedules and take as many breaks during work hours as they want. This scenario illustrates that Spiral Animation uses _____.
A) self-control
B) concertive control
C) bureaucratic control
D) normative control

Accepted Answer

The answer of As long as the graphic designers at...

Question 10

_____ predict how changes in businesses will affect their ability to take in more money than they pay out.
A) Cash flow analyses
B) Balance sheets
C) Financial ratios
D) Income statements

Accepted Answer

Cash flow analyses are specifically designed to predict how changes in a business will affect their ability to take in more money than they pay out. They focus on the actual cash that comes into and goes out of a business, including operating, investing, and financing activities. Balance sheets, financial ratios, and income statements all provide important financial information, but do not focus specifically on predicting cash flow.

Question 11

Unlike cash flow analysis, zero-based budgeting _____.
A) requires managers to outline a budget from scratch each year
B) helps to track a business's liquidity, efficiency, and profitability over time
C) predicts how changes in a business will affect its ability to take in more cash than it pays out
D) provides a snapshot of a company's financial position at a particular time

Accepted Answer

Zero-based budgeting requires managers to start from scratch each year and justify every dollar spent, whereas cash flow analysis focuses on tracking how much cash a business is bringing in and paying out over time.

Question 12

All the copy editors at Edit Lab can work at their own pace provided they make their submissions on time. This is a convenient setup for the employees at Edit Lab because it uses _____.
A) self-control
B) concertive control
C) behavior control
D) normative control

Accepted Answer

Self-control is the ability to control one's own behavior, emotions, and desires. In this case, the copy editors at Edit Lab are able to work at their own pace, but they must still make their submissions on time. This requires them to have self-control in order to stay on task and meet their deadlines.

Question 13

The president of Krypton Inc. wants to know the company's current financial condition. The financial report that can provide this information is the _____.
A) cash flow statement
B) financial ratio report
C) balance sheet
D) income statement

Accepted Answer

The balance sheet provides information about a company's assets, liabilities, and equity at a specific point in time, which can give the president an understanding of the company's financial condition. The cash flow statement shows the cash inflows and outflows over a period of time, while the income statement shows the company's revenues and expenses over a period of time. A financial ratio report is a tool used to analyze a company's financial performance, but it does not provide a comprehensive overview of the company's financial condition.

Question 14

To cut costs, Wray Enterprises laid off 30 employees. Thereafter, the existing employees were given cross-training to perform additional job duties. This led to increased productivity, but it also increased the instances of errors. This scenario illustrates _____.
A) benchmarking
B) suboptimization
C) brainstorming
D) accommodation

Accepted Answer

The scenario illustrates suboptimization because cutting costs by laying off employees led to increased productivity, but it also resulted in increased errors. This means that the focus was on optimizing one aspect (costs), while neglecting other important factors such as quality and employee workload.

Question 15

The founder of Wonder Wheels, a motorcycle manufacturer, wants to know the net profit made by the company over the past one year. The financial report he should look at is the _____.
A) income statement
B) financial ratio report
C) balance sheet
D) annual budget report

Accepted Answer

The income statement shows the revenue, expenses, and net profit (or loss) of a company over a specific period of time, usually a year. It will provide the founder with the information he is looking for regarding Wonder Wheels' net profit over the past year. The financial ratio report provides information on liquidity, profitability, and other financial performance measures, but will not give a specific net profit amount. The balance sheet shows a company's assets, liabilities, and equity at a specific point in time, but does not provide information on the company's net profit. The annual budget report outlines the projected income and expenses for the upcoming year, rather than reporting on the previous year's performance.

Question 16

Chenrezic is an organization that specializes in subtitling foreign movies and television shows. According to the company's policy, if managers and employees meet quality standards, they can avail as many leaves as they like. This scenario illustrates that Chenrezic uses _____.
A) self-control
B) concertive control
C) bureaucratic control
D) normative control

Accepted Answer

The answer of Chenrezic is an organization that specializes in...

Question 17

Arthur, the managing director of Wall Blues Consultancy, wants to know his company's financial position two years ago. Which of the following tools can provide him this information?
A) Cash flow statements
B) Income statements
C) Balance sheets
D) Financial ratios

Accepted Answer

The balance sheet provides a snapshot of a company's financial position at a specific point in time, including assets, liabilities, and equity. It will show the company's financial position from two years ago. The other three options provide information on a company's financial performance over a period of time, but not its financial position at a specific point in time.

Question 18

Which of the following is an advantage of the balanced scorecard?
A) It reduces the need for innovation and learning.
B) It eliminates the problem of regulation costs.
C) It minimizes the chances of suboptimization.
D) It helps managers focus solely on financial measures.

Accepted Answer

The balanced scorecard minimizes the chances of suboptimization by looking at a variety of measures in addition to financial ones. This encourages managers to consider factors beyond just short-term financial goals, which can lead to better decision-making and ultimately better overall results for the organization. Option A is incorrect as the balanced scorecard promotes innovation and learning. Option B is incorrect since the balanced scorecard does not address regulation costs. Option D is incorrect since the balanced scorecard does not solely focus on financial measures; it takes a more holistic view.

Question 19

Dwayne, a manager at Bruce Enterprises, prepares a financial plan for the allocation of funds to efficiently achieve company goals. The plan also includes the estimation of expenditures for the next year. This plan is an example of a(n) _____.
A) budget
B) asset
C) dividend
D) capital

Accepted Answer

The description is of a budget, which is a financial plan that includes estimates of future expenditures and allocation of funds to achieve company goals.

Question 20

The CEO of Fox Mart wants to know what his company's financial position looked like on the 31st of December of the previous year. The financial report he should look at is the company's _____.
A) cash flow analysis
B) financial ratio
C) balance sheet
D) annual budget

Accepted Answer

The balance sheet provides a snapshot of a company's financial position at a specific point in time, including assets, liabilities, and equity. Therefore, it would be the best financial report for the CEO of Fox Mart to look at to determine their financial position on the 31st of December of the previous year. A cash flow analysis would show how much cash the company generated or used during a specific period but wouldn't provide a snapshot of their financial position. Financial ratios would provide an overview of the company's financial performance but wouldn't give a specific date's financial position. The annual budget is a projection of a company's expected income and expenses for the upcoming year and wouldn't provide information on the previous year's financial position.

Quiz 16: Control

_____ are calculations typically used to track a business's liquidity, efficiency, and profitability over time compared to other businesses in its industry.

Argon Inc., a textile company, installed new equipment in its factory two years ago. This increased the production rate. The chief executive officer of Argon wants to determine the current assets and liabilities of the company. The financial report that can provide this information is the _____.

Which of the following is a difference between balance sheets and income statements?

_____ are accounting statements that show what has happened to an organization's revenue, expenses, and net profit over a period of time.

The accountants at Global Finances can take work home for as many days as they like as long as their spreadsheets are up to date and accurate. This scenario illustrates that Global Finances uses _____.

_____ occurs when performance improvement is attained in one part of an organization but only at the expense of decreased performance in another part.

The chief financial officer of Cherry Toys wants to determine the losses incurred by the company's sales team. The financial report she should look at is the _____.

As long as the graphic designers at Spiral Animation deliver five designs every week, they are allowed to make their own schedules and take as many breaks during work hours as they want. This scenario illustrates that Spiral Animation uses _____.

_____ predict how changes in businesses will affect their ability to take in more money than they pay out.

Unlike cash flow analysis, zero-based budgeting _____.

All the copy editors at Edit Lab can work at their own pace provided they make their submissions on time. This is a convenient setup for the employees at Edit Lab because it uses _____.

The president of Krypton Inc. wants to know the company's current financial condition. The financial report that can provide this information is the _____.

To cut costs, Wray Enterprises laid off 30 employees. Thereafter, the existing employees were given cross-training to perform additional job duties. This led to increased productivity, but it also increased the instances of errors. This scenario illustrates _____.

The founder of Wonder Wheels, a motorcycle manufacturer, wants to know the net profit made by the company over the past one year. The financial report he should look at is the _____.

Chenrezic is an organization that specializes in subtitling foreign movies and television shows. According to the company's policy, if managers and employees meet quality standards, they can avail as many leaves as they like. This scenario illustrates that Chenrezic uses _____.

Arthur, the managing director of Wall Blues Consultancy, wants to know his company's financial position two years ago. Which of the following tools can provide him this information?

Which of the following is an advantage of the balanced scorecard?

Dwayne, a manager at Bruce Enterprises, prepares a financial plan for the allocation of funds to efficiently achieve company goals. The plan also includes the estimation of expenditures for the next year. This plan is an example of a(n) _____.

The CEO of Fox Mart wants to know what his company's financial position looked like on the 31st of December of the previous year. The financial report he should look at is the company's _____.