Question 1

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

Accepted Answer

ABC (Activity-Based Costing) accounting focuses on identifying and assigning costs to specific activities and allocating them based on their consumption. This results in a more accurate and precise allotment of overhead costs, allowing accountants to charge costs more accurately.

Question 2

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 a crucial step in the management process that monitors the progress of the company towards achieving its goals and objectives. By regularly evaluating and controlling the performance of the company, managers can take corrective action whenever necessary to ensure that the company stays on track towards achieving its goals. Therefore, the statement is true.

Question 3

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 financial metric that calculates the profit earned by an investment relative to its cost. It takes into account all the revenues, costs, and expenses associated with the investment, which makes it a comprehensive figure.

Question 4

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 can be conducted to evaluate various activities, functional areas, and divisions within an organization, including corporate social responsibility, marketing department, and international division.

Question 5

The revenue center is measured in terms of efficiency.

Accepted Answer

The revenue center is measured in terms of profitability, not efficiency.

Question 6

Operating cash flow is also known as free cash flow.

Accepted Answer

Operating cash flow is not the same as free cash flow. Operating cash flow refers to the cash generated from the core operations of a business, while free cash flow takes into account the capital expenditure and is a measure of the cash available for distribution to stakeholders after all expenses have been accounted for.

Question 7

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 is being adopted to help corporations proactively identify and mitigate risks that can arise from environmental uncertainty, such as changes in market conditions, regulatory requirements, and technological advancements. By implementing an enterprise-wide approach to risk management, organizations can better protect themselves against unforeseen risks and improve their ability to achieve their strategic objectives.

Question 8

Behavior, output, and input controls are all interchangeable.

Accepted Answer

Behavior, output, and input controls are different types of controls used in information systems, and they are not interchangeable. Behavior controls are used to prevent errors and fraud by influencing the actions of individuals within an organization. Output controls are used to monitor and regulate the output of information systems, such as reports or data files. Input controls are used to ensure that data entered into an information system is accurate, complete, and valid. Each type of control serves a distinct purpose and cannot be replaced by another type of control.

Question 9

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 10

EVA may eventually replace ROI as the standard performance measure.

Accepted Answer

EVA (Economic Value Added) is gaining popularity as a performance measure as it takes into account the cost of capital and provides a more accurate picture of a company's overall profitability than ROI (Return on Investment) which only considers the return on the initial investment. As companies place more emphasis on maximizing shareholder value, EVA may eventually replace ROI as the standard performance measure.

Question 11

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

Accepted Answer

Stickiness refers to the ability of a website to keep users engaged and on the site for longer periods of time, while eyeballs refer to the number of visitors or views a website receives. These are both non-financial performance measures commonly used in the evaluation of internet business ventures.

Question 12

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 statement is true. The balanced scorecard is a strategic management tool that includes financial metrics as well as operational metrics in order to provide a more well-rounded view of a company's performance. The financial metrics focus on past performance, while the operational metrics focus on current and future activities related to customer satisfaction, internal processes, and innovation/improvement.

Question 13

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

Accepted Answer

Behavior controls provide guidelines and instructions on how to achieve a specific objective or outcome. This can be done through policies, rules, standard operating procedures, and orders from a superior. These controls help to ensure consistency and efficiency in achieving organizational goals.

Question 14

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

Accepted Answer

ABC (Activity-Based Costing) is an accounting method for allocating both direct and indirect costs to individual products or services based on the activities that go into producing them.

Question 15

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 a common steering control used by retail stores. It measures how many times a company sells and replaces its stock of goods during a certain period, indicating how efficiently the inventory is managed and how quickly it is being converted into sales. By monitoring this ratio, retailers can adjust their ordering policies, pricing strategies, and marketing efforts to optimize their stock levels and maximize their profits.

Question 16

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 17

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

Accepted Answer

Developing appropriate measures is crucial for effective control but it can be challenging to come up with accurate and relevant metrics for all important activities and outputs.

Question 18

ROI stands for return on incentives.

Accepted Answer

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

Question 19

ISO 9000 Standards Series, developed by the International Standards Association of Geneva, Switzerland, is an example of a behavior control.

Accepted Answer

ISO 9000 Standards Series provides guidelines for quality management and is used as a standard for certification of quality management systems. As a set of standards, it specifies requirements for companies to follow to ensure that their products or services meet the desired quality standards. Therefore, it is an example of behavior control.

Question 20

Performance is the end result of activity.

Accepted Answer

Performance is indeed the end result of activity. It is what we achieve after we have put in effort and performed a task or an activity.

Quiz 11: Evaluation and Control