Question 1

Effective managers make sure that activities are going as planned with the help of control.

Accepted Answer

Effective managers use control as a tool to monitor and ensure that activities are going as planned.

Question 2

Control systems lay out a framework for the future, and, in this sense, provide a blueprint for control.

Accepted Answer

Control systems are designed to regulate and guide the operation of systems, not to lay out a framework for the future. They ensure that systems operate within desired parameters, rather than providing a future blueprint.

Question 3

Budgetary control is the process of finding out what's being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences.

Accepted Answer

Budgetary control is a process that involves comparing actual results with budgeted data to determine deviations, identify the reasons for those deviations, and take corrective actions to remedy them. This helps to ensure that resources are utilized effectively and efficiently to achieve organizational objectives.

Question 4

Control systems detect and correct significant variations, or discrepancies, in the results of planned activities.

Accepted Answer

Control systems are designed to detect and correct significant variations or discrepancies in the results of planned activities. This allows organizations to make adjustments and ensure that desired outcomes are achieved.

Question 5

Summarizing balance sheet items over a long period of time uncovers important trends.

Accepted Answer

Summarizing balance sheet items over a long period of time can reveal trends such as changes in asset or liability levels, shifts in the composition of assets or liabilities, and changes in financial ratios, which can provide valuable insights for investors and stakeholders.

Question 6

The lack of controls can frequently cause irreparable damage to organizations.

Accepted Answer

Without controls, organizations are vulnerable to fraud, errors, and other risks that can harm their reputation and financial stability.

Question 7

Budgeting information is confined to finances.

Accepted Answer

Budgeting information is not confined to finances.The entire enterprise and any of its units can create budgets for their activities,using units other than dollars,if appropriate.For example,many organizations use production budgets forecasting physical units produced and shipped,and labor can be budgeted in skill levels or hours of work required.

Question 8

The downside of establishing performance targets and standards is that they may not be supported by other elements of the control system.

Accepted Answer

While setting performance targets and standards can be useful for ensuring accountability and guiding decision-making, they also rely on other aspects of the control system to be effective. If these other elements, such as accurate measurement and monitoring, clear communication, and appropriate incentives, are not in place, then the targets and standards may not be meaningful or achievable.

Question 9

Traditional methods of cost accounting are still appropriate in today's business environment.

Accepted Answer

Traditional methods of cost accounting have limitations and may not accurately reflect the true cost of products or services in today's complex business environment. Alternative methods such as activity-based costing and lean accounting are becoming more popular.

Question 10

With the principle of exception, the manager is concerned with performance that equals or closely approximates the expected results.

Accepted Answer

The answer of With the principle of exception, the manager...

Question 11

The cash budget should be prepared before all other budget estimates are completed.

Accepted Answer

The cash budget is typically prepared after other budget estimates, such as sales, production, and expense budgets, as it relies on information from these budgets to project cash inflows and outflows.

Question 12

When supervisors monitor behavior, they are exercising feedback control.

Accepted Answer

The answer of When supervisors monitor behavior, they are exercising...

Question 13

In feedforward control, a manager waits for results and compares them with goals.

Accepted Answer

In feedforward control, a manager anticipates potential issues and takes preventive measures before the results are obtained. Therefore, they do not wait for results and compare them with goals.

Question 14

Six sigma companies have a high level of product or service defects.

Accepted Answer

Six sigma companies have a low level of product or service defects, as the goal of six sigma methodology is to reduce variability and improve quality to reach a level of 3.4 defects per million opportunities (DPMO).

Question 15

The activity-based costing method allocates costs across business processes and provides a more accurate picture of how costs should be charged to products and services.

Accepted Answer

Activity-based costing (ABC) is a methodology that assigns costs to activities based on the resources they consume and then allocates those costs to products or services based on their usage of those activities. This approach provides a more accurate picture of the true cost of producing a product or providing a service, as well as the profitability of individual products or services.

Question 16

The chief financial officer (CFO) needs to be more concerned with details than with recommending adjustments when needed.

Accepted Answer

The CFO is responsible for overseeing the financial operations of an organization and providing strategic financial guidance. This includes analyzing financial data, identifying areas for improvement, and making recommendations for adjustments when needed. While the CFO does need to have a good understanding of financial details, their focus should be on strategic decision-making and providing leadership to the finance team.

Question 17

During challenging economic times when resources are limited and budgets need to be stretched, managerial control becomes insignificant for survival.

Accepted Answer

Managerial control is crucial during challenging economic times as it helps ensure efficient use of limited resources, maintains budget discipline, and guides the organization through strategic decision-making to survive and thrive.

Question 18

Some means of control are necessary because once managers form plans and strategies, they must ensure that the plans are carried out.

Accepted Answer

Control is necessary to ensure that plans and strategies are effectively implemented and that outcomes are consistent with desired goals and objectives. Without control, there may be deviations from the intended outcome and plans may not be properly carried out.

Question 19

External audits provide essential feedback control when they identify legal and ethical lapses that could harm the organization and its reputation.

Accepted Answer

External audits can provide independent and objective evaluation of an organization's financial and operational activities, which can identify legal and ethical lapses and prevent potential harm to the organization and its reputation.

Question 20

Controlling by profit and loss is most commonly used for the entire enterprise.

Accepted Answer

Controlling by profit and loss is most commonly used for the entire enterprise as it allows for an overall analysis of the company's financial performance. However, it can also be used for individual products, departments, or projects within the enterprise.

Quiz 14: Managing Control