Professional Documents
Culture Documents
Ans: c
Q.2).
a)
b)
c)
d)
Ans: d
Q.3). Which of the following statements about performance management systems
is not true?
a) Performance management systems are ineffective
b) They encourage a short-term view among managers
c) Recommendations are prescriptive and suggest one best way
d) They improve organisational performance in the long-term
Ans: d
Q.4).
a)
b)
c)
d)
Ans: b
Q.5). DU PONT Analysis deals with:
a)
b)
c)
d)
Ans: b
Q.6).
a)
b)
c)
d)
Ans: a
Q.7).
a)
b)
c)
d)
Ans: c & d
Q.8). Maintaining performance includes:
a) Checking up staff to ensure they perform optimally
b) Provide coaching and training where gaps exist
c) Formal feedback
d) Disciplining poor performance
Ans: b & d
Q.9).
a)
b)
c)
d)
Ans: b & d
Q.10). Budgetary control involves all but one of the following:
a) Modifying future plans.
b) Analyzing differences.
c) Using static budgets.
d) Determining differences between actual and planned results.
Ans: c
Q.11).
a)
b)
c)
d)
Ans: b
Ans: d
Q.18).
a)
b)
c)
d)
In the formula for residual income, the factors for computing residual income are:
Contribution margin, controllable margin, and average operating assets.
Controllable margin, average operating assets, and ROI.
Controllable margin, average operating assets, and minimum rate of return.
Controllable margin, ROI, and minimum rate of return.
Ans: c
Q.19). When managers of subunits throughout an organization strive to achieve the goals
set by top management, the result is:
a) Goal congruence.
b) Planning and control.
c) Responsibility accounting.
d) Delegation of decision making.
Ans: a
Q.20). Which of the following is not an example of a responsibility center?
a) Revenue center.
b) Profit center.
c) Investment center.
d) Contribution center.
Ans: d
Q.21). Which of the following would have a low likelihood of being organized as a profit
center?
a) A maintenance department that charges users for its services.
b) The billing department of an Internet Services Provider (ISP).
c) The mayor's office in a large city.
d) Both "C" and "D" above.
Ans: d
Q.22). A cost center manager:
a) Does not have the ability to produce revenue.
b) May be involved with the sale of new marketing programs to clients.
c) Would normally be held accountable for producing an adequate return on invested
capital.
d) Often oversees divisional operations.
Ans: a
Q.23). A responsibility center in which the manager is held accountable for the profitable use
of assets and capital is commonly known as a(n):
a) Cost center.
b) Revenue center.
c) Profit center.
d) Investment center.
Ans: d
Q.24). Performance reports help managers:
a) Use management by exception and effectively control operations.
b) Design their organizational hierarchy.
c) Pinpoint trouble spots.
d) By assisting with functions "A" and "D."
Ans: d
Q.25). Performance reports provide feedback to managers and allow them to better control
operations.
II. Many performance reports have budget, actual, and variance data.
III. Performance reports are often structured around a firm's organizational hierarchy
that is, data relating to lower-level units (e.g., departments) are combined and flow into
higher-level units (e.g., stores).
Which of the above statements is (are) true?
a) I only.
b) I and II.
c) I and III.
d) I, II, and III.
Ans: d
Q.26). Responsibility accounting systems strive to:
a) Place blame on guilty individuals.
b) Provide information to managers.
c) Hold managers accountable for both controllable and non-controllable costs.
d) Provide information so that managers can make decisions that are in the best interest of
their individual centers rather than in the best interests of the firm as a whole.
Ans: b
Q.27). Controllable costs, as used in a responsibility accounting system, consist of:
a) Only fixed costs.
b) Only direct materials and direct labor.
c) Those costs that a manager can influence in the time period under review.
d) Those costs about which a manager has some knowledge. Those costs that are
influenced by parties external to the organization.
Ans: c
Q.28). For a company that uses responsibility accounting, which of the following costs is
least likely to appear on a performance report of an assembly-line supervisor?
a) Direct materials used.
b) Departmental supplies.
c) Assembly-line labor.
d) Assembly-line facilities depreciation.
Ans: d
Q.29).
a)
b)
c)
d)
Ans: c
Q.30). If capital expense is recorded as revenue expense then which calculation will be
wrong?
a) Bank balance
b) Debtors
c) Creditors
d) Net profit
Ans: d
Q.31).
i)
ii)
iii)
Capital expenditure
Car purchased for sale
Machine purchased for business use
Road tax and insurance premium of delivery van
i & ii
ii & iii
i & iii
i, ii & iii
Ans: b
Q.32). Sale of machine of machine merchandising business
a) Capital receipt
b) Capital income
c) Revenue income
d) Revenue receipt
Ans: d
Q.33).
i)
ii)
iii)
i & ii
ii & iii
i & iii
ii
Ans: b
Q.34). A Balanced Scorecard helps the organisation to:
a)
b)
c)
d)
Ans: b c & d
Q.35). What do we call a formal comparison of the actual costs and benefits of a project with
original estimates?
a)
b)
c)
d)
Post-completion audit
Feedback audit
Cost-benefit analysis
Business scorecard report
Ans: a
Q.36). What is the term used to describe the value assigned to the goods or services sold or
rented from one unit of an organization to another
a)
b)
c)
d)
Variable cost
Fixed cost
Transfer price
Full service cost
Ans: c
Q.37). What should be added to the opportunity cost of the resource at the point of transfer to
obtain the general principle transfer price that leads managers to make decisions in a firm's
best interest?
a)
b)
c)
d)
Sunk cost
Variable cost
Outlay cost
Transfer cost
Ans: c
Q.38). If an intermediate market exists, the general rule is that the optimal transfer price should
be the:
a)
b)
c)
d)
Ans: c
Q.39). Which transfer pricing method will preserve the subunit autonomy?
a)
b)
c)
d)
Variable-cost pricing
Negotiated pricing
Cost-based pricing
Full-cost pricing
Ans: b
Q.40). When a perfectly competitive market exists and the firm uses market-based transfer
pricing, the firm can achieve all of the following except for:
a)
b)
c)
d)
Management effort
Subunit performance evaluation
Price monopoly
Goal congruence
Ans: c
Q.41). The method of calculating return on assets which highlights the importance of sales,
profit margin and asset turnover is known as
a)
b)
c)
d)
Ans: b
Q.42). Asset utilization ratios measure all of the following except
a) Productivity of fixed assets in terms of sales
b) The relationship of the income statement to cash of the asset groups on the balance
c) Sheet.
d) How many times per year the inventory is sold and accounts receivable collected.
Ans: d
Q.43). Financial ratios are used to weigh and evaluate:
a)
b)
c)
d)
Ans: a
Q.44).
_______________ is a measure of operating performance that indicates how
successful the firm has been at increasing its MVA in a given year.
a)
b)
c)
d)
Ans: a
Q.45). What is not included in a firms expenses?
a)
b)
c)
d)
Ans: d
Q.46). ROI can be viewed as a function of the net profit margin times
a)
b)
c)
d)
Sales.
EAT.
The total asset turnover.
Equity multiplier.
Ans: c
Q.47). If a significant portion of the assets of a firm has a market value ________ book value,
the quality of the firms balance sheet is reduced.
a)
b)
c)
d)
Ans: b
Equal to
Substantially below
Substantially above
None of the above
Profitability ratio
Net profit margin ratio
Times interest earned ratio
return on investment ratio
Ans: c
Q.49). Which of the following variable does ROI examine?
a)
b)
c)
d)
Eat
Sales
Total assets
All of the above
Ans: d
Q.50). The ________ compares the dollar return generated by the firm to the return expected
by the investors of the capital invested by them in the firm.
a)
b)
c)
d)
EBIT
EVA
ROI
DuPont chart
Ans: b
Q.51). Return on Assets and Return on Investment Ratios belong to:
a)
b)
c)
d)
Liquidity Ratios
Profitability Ratios,
Solvency Ratios,
Turnover
Ans: b
Investment Decision,
Working Capital Management
Marketing Management,
Capital Structure.
Ans: a
Q.53). Capital Budgeting deals with:
a) Long-term Decisions,
b) Short-term Decisions,
Ans: c
Q.55). Capital Budgeting Decisions are:
a)
b)
c)
d)
Reversible,
Irreversible,
Unimportant,
All of the above.
Ans: b
Q.56). Which of the following is not incorporated in Capital Budgeting?
a)
b)
c)
d)
Tax-Effect,
Time Value of Money,
Required Rate of Return,
Rate of Cash Discount.
Ans: d
Expansion Programme,
Merger,
Replacement of an Asset,
Inventory Level.
Ans: d
Q.58). A sound Capital Budgeting technique is based on:
a)
b)
c)
d)
Cash Flows,
Accounting Profit,
Interest Rate on Borrowings,
Last Dividend Paid.
Ans: a
Q.59). Which of the following is not a relevant cost in Capital Budgeting?
a)
b)
c)
d)
Sunk Cost,
Opportunity Cost,
Allocated Overheads,
Both (a) and (c) above.
Ans: d
Q.60). Capital Budgeting Decisions are based on:
a)
b)
c)
d)
Incremental Profit,
Incremental Cash Flows,
Incremental Assets,
Incremental Capital.
Ans: b
Q.61). Which of the following does not affect cash flows proposal?
a)
b)
c)
d)
Salvage Value,
Depreciation Amount,
Tax Rate Change,
Method of Project Financing.
Ans: d
Ans: c
Q.63). Which measure of performance is arguably most useful to shareholders
a)
b)
c)
d)
Ans: b
Q.64). The balanced scorecard approach is a framework for measuring performance based on
four factors. These are 'innovation and learning', 'the customer perspective', 'the internal
perspective' and:
a)
b)
c)
d)
Ans: c
Q.65). The Balanced Scorecard approach has been criticized for leaving out certain measures.
One of these is:
a)
b)
c)
d)
Financial measures
Employee satisfaction measures
Customer satisfaction measures
Technological innovation measures
Ans: b
Q.66). How many measures do Kaplan and Norton recommend an organization should include
when using the balanced scorecard approach?
a)
b)
c)
d)
10-20
20-30
50-100
80-120
Ans: b
Q.67). In the balanced scorecard approach quality would come under which perspective?
a)
b)
c)
d)
Ans: a
Q.68). The U.S. National Quality Award is named after
a)
b)
c)
d)
Joseph Juran
Genichi Taguchi
W. Edwards Deming
Malcolm Baldrige
Ans: d
Q.69). The overall purpose of the balanced scorecard approach is to:
a)
b)
c)
d)
Ans: a
Q.70). The problem with using financial measures alone to measure organizational
performance is that:
a)
b)
c)
d)
Ans: a
Q.71). Which of the following is not true with reference capital budgeting?
a)
b)
c)
d)
Ans: c
Ans: c
Q.73). Which of the following is not true for capital budgeting?
a)
b)
c)
d)
Ans: b
Q.74). Which of the following is not applied in capital budgeting?
a) Cash flows be calculated in incremental terms,
b) All costs and benefits are measured on cash basis,
Ans: c
Q.76). Which of the following is not included in incremental A flows?
a)
b)
c)
d)
Opportunity Costs,
Sunk Costs,
Change in Working Capital,
Inflation effect.
Ans: b
Ans: c
Q.78). In Capital Budgeting, Sunk cost is excluded because it is:
a)
b)
c)
d)
Of Small Amount,
Not Incremental,
Not Reversible,
All of the Above.
Ans: b
Q.79). Savings in respect of a cost is treated in capital budgeting as:
a)
b)
c)
d)
An Inflow,
An Outflow,
Nil,
None of the above.
Ans: a
Q.80). According to DuPont analysis, an increase in the profit margin (all else constant) should:
a)
b)
c)
d)
Ans: a
Q.81). According to DuPont analysis, an increase in asset turnover (all else constant) should:
a)
b)
c)
d)
Ans: a
Q.82). According to DuPont analysis, an increase in the equity multiplier (all else constant)
should:
a)
b)
c)
d)
Ans: b
Q.83). The Complete Balanced Scorecard Strategy Map lists perspectives along with sub
items. Identify the correct link for Financial Perspective
a)
b)
c)
d)
Customer solutions
Operations Theme
Strategic Competencies
Productivity Strategy
Ans: d
Q.84). Identify the correct link for Customer Perspective in The Complete Balanced Scorecard
Strategy Map
a)
b)
c)
d)
Product Leader
Innovation Theme
Revenue Growth Strategy
Organization Alignment
Ans: a
Q.85). Internal Perspective is part of the Complete Balanced Scorecard Strategy. This is a
correct sub item for this perspective
a) Regulatory and Society Theme
b) Customer solutions
c) Strategic Technologies
d) Revenue Growth Strategy
Ans: a
Q.86). Learning & Growth Perspective: role for intangible assets -- people, systems, climate
and culture is part of the BSC Strategy. Identify which of the following is a sub item of
Learning & Growth Perspective
a) Improve shareholder value
b) Low total cost
c) Operations theme
d) Strategic technologies
Ans: d
Q.87). Nonprofit and government organizations (NPGOs)
a)
b)
c)
d)
Ans: c
Q.88). The process of evaluating an employees current and/or past performance relative to his
or her performance standards is called _____.
a)
b)
c)
d)
recruitment
employee selection
performance appraisal
organizational development
Ans: c
Q.89). Pitfalls exists the same as with any new technology or management tool. All of the
following describe these pitfalls except
e)
f)
g)
h)
Ans: c
Q.90). Which of the following statements regarding flaws suffered by financial measures is not
correct:
a) They are hard to quantify
b) They do little to motivate employees to improve accounting profits
c) They are not effective in getting managers' attention
d) They are useful in identifying operational problems
Ans: d
Q.91). If return on investment is a measure used on the balanced scorecard, under which
perspective would it be listed
a) Financial perspective
b) Customer perspective
c) Learning and growth perspective
d) Internal business perspective
Ans: a
Q.92). Which one of the following is not one of the Balanced Scorecards four generic
perspectives
a)
b)
c)
d)
Ans: d
Q.93). Which one of the following is a lag performance indicator
a)
b)
c)
d)
Ans: b
Q.94). Which one of the following statements is true
a)
b)
c)
d)
Ans: c
Q.95). Which of the following statements is false? Balanced scorecards
a) Are one type of performance dashboard
Six Sigma
Total Quality Management (TQM)
Zero Defect
Malcolm Baldridge Quality Award
Ans: d
Q.98). The drive in world markets to produce superior goods has led some countries to
recognize or award prizes. What is the name of U.S. prize for developing quality products:
a)
b)
c)
d)
Ans: b
Q.99). When goal setting, performance appraisal, and development are consolidated into a
single, common system designed to ensure that employee performance supports a
companys strategy, it is called _____.
a)
b)
c)
d)
Ans: b
Q.100).
Performance management combines performance appraisal with _____ to
ensure that employee performance is supportive of corporate goals.
a)
b)
c)
d)
Ans: c
Goal setting
Absenteeism
Incentive systems & Goal setting
Strategic management