Question 1

A ratio of profit to capital used or a rate of return from capital is referred to as

Accepted Answer

A)   The debt-equity ratio.
B)   The profitability ratio.
C)   Return on investment (ROI) .
D)   The current ratio.
E)   The leverage ratio.F) C) and D)
G) A) and E)

Question 2

A manager designing a control system should evaluate the information provided by the system in terms of which of the following questions?

Accepted Answer

A)   Does the system streamline information to minimize management effort?
B)   Does the system provide information about how competitors are doing?
C)   Does it provide information free from perception problems?
D)   Does the system provide information to decision makers outside of the organization?
E)   Does the system provide people with data relevant to the decisions they need to make?F) A) and B)
G) A) and C)

Question 3

The three common sources of information for measuring performance are written reports, electronic observation, and personal observation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following are the basic elements of a balance sheet?

Accepted Answer

A)   Income, expenses, and profit or loss.
B)   Operations, sales, and growth.
C)   Assets, liabilities, and stockholder's equity.
D)   Income, deductions, and taxes.
E)   Budgets, controls, and corrective actions.F) B) and D)
G) A) and D) C

Question 5

Formal bureaucratic control systems have always been the most pervasive and continue to be the most effective in organizations.

Accepted Answer

A) True 
 B)False

Question 6

A managerial principle stating that control is enhanced by concentrating on the exceptions or significant deviations from the expected result or standard is referred to as

Accepted Answer

A)   The principle of control.
B)   A management audit.
C)   Management myopia.
D)   The principle of exception.
E)   Control stages.F) All of the above
G) D) and E)

Question 7

Profitability ratios

Accepted Answer

A)   Show the relative amount of funds in the business supplied by creditors and shareholders.
B)   Indicate a company's ability to pay short-term debts.
C)   Indicate management's ability to generate a financial return on sales or investment.
D)   Show the profit margins for the last six months.
E)   Indicate the future profits from the current customer base.F) B) and E)
G) D) and E)

Question 8

________ is in effect when supervisors watch employees to ensure that they work efficiently and avoid mistakes.

Accepted Answer

A)   Organizational modification
B)   Concurrent control
C)   Management adjustment
D)   Feedback control
E)   Feedforward controlF) None of the above
G) All of the above

Question 9

In contrast to market controls, bureaucratic controls involve the use of economic forces to regulate performance.

Accepted Answer

A) True 
 B)False  False

Question 10

By definition, management audits are internal, not external.

Accepted Answer

A) True 
 B)False

Question 11

Electronic monitoring of telemarketers' conversations with potential clients is an example of _______ control.

Accepted Answer

A)   operator
B)   concurrent
C)   preliminary
D)   technological
E)   feedbackF) B) and E)
G) C) and D)

Question 12

The debt-equity ratio is an example of a

Accepted Answer

A)   Profit and loss statement.
B)   Profitability ratio.
C)   Leverage ratio.
D)   Current ratio.
E)   Liquidity ratio.F) B) and E)
G) A) and B)

Question 13

The profit and loss statement is an itemized financial statement of the income and expenses of a company's operations.

Accepted Answer

A) True 
 B)False

Question 14

Performance standards can be set with respect to which of the following?

Accepted Answer

A)   Quantity, quality, and temperament.
B)   Quality, temperament, and cost.
C)   Cost, quality, and satisfaction.
D)   Quality, time used, and quantity.
E)   Time used, quality, and satisfaction.F) A) and E)
G) A) and B)

Question 15

Employees resist formal control systems for which of the following reasons?

Accepted Answer

A)   Control systems can change the power structure of the organization.
B)   Control systems prevent individuals from gaining new expertise.
C)   Control systems decrease employees' understanding of the required work.
D)   Control systems require cooperation between employees.
E)   Control systems prevent job requirements from changing.F) A) and B)
G) All of the above

Question 16

The typical control system has six major steps.

Accepted Answer

A) True 
 B)False

Question 17

An important benefit of activity based costing is

Accepted Answer

A)   The simplicity of cost allocation.
B)   The acknowledgment and reward of employee effort.
C)   The ability to highlight waste and streamline business processes.
D)   The acceptance by stockholders of other sources of financing.
E)   The ability to monitor the board of directors.F) A) and B)
G) A) and C)

Question 18

Procedures used to verify accounting reports and statements are referred to as

Accepted Answer

A)   Management audits.
B)   Accounting audits.
C)   Activity-based costing (AB
C)  .
D)   Financial analysis.
E)   Budget audits.F) A) and B)
G) A) and C) B

Question 19

Management myopia refers to managers who

Accepted Answer

A)   Lack motivation to reach their performance targets and in turn find it difficult to motivate subordinates.
B)   Limit their focus to short-term profits at the expense of longer-term concerns.
C)   Find themselves unable to rise beyond a certain level in the organizational hierarchy.
D)   Are promoted beyond their level of competence.
E)   Find they cannot progress within an organization due to corporate downsizing or paring of middle management layers.F) A) and E)
G) B) and D)

Question 20

The last step in the control process is to compare performance with the standard.

Accepted Answer

A) True 
 B)False

Exam 16: Managerial Control

A ratio of profit to capital used or a rate of return from capital is referred to as

Correct AnswerverifiedShow Answer

A manager designing a control system should evaluate the information provided by the system in terms of which of the following questions?

Correct AnswerverifiedShow Answer

The three common sources of information for measuring performance are written reports, electronic observation, and personal observation.

Correct AnswerverifiedShow Answer

Which of the following are the basic elements of a balance sheet?

Correct AnswerverifiedC

Formal bureaucratic control systems have always been the most pervasive and continue to be the most effective in organizations.

Correct AnswerverifiedShow Answer

A managerial principle stating that control is enhanced by concentrating on the exceptions or significant deviations from the expected result or standard is referred to as

Correct AnswerverifiedShow Answer

Profitability ratios

Correct AnswerverifiedShow Answer

________ is in effect when supervisors watch employees to ensure that they work efficiently and avoid mistakes.

Correct AnswerverifiedShow Answer

In contrast to market controls, bureaucratic controls involve the use of economic forces to regulate performance.

Correct AnswerverifiedFalse

By definition, management audits are internal, not external.

Correct AnswerverifiedShow Answer

Electronic monitoring of telemarketers' conversations with potential clients is an example of _______ control.

Correct AnswerverifiedShow Answer

The debt-equity ratio is an example of a

Correct AnswerverifiedShow Answer

The profit and loss statement is an itemized financial statement of the income and expenses of a company's operations.

Correct AnswerverifiedShow Answer

Performance standards can be set with respect to which of the following?

Correct AnswerverifiedShow Answer

Employees resist formal control systems for which of the following reasons?

Correct AnswerverifiedShow Answer

The typical control system has six major steps.

Correct AnswerverifiedShow Answer

An important benefit of activity based costing is

Correct AnswerverifiedShow Answer

Procedures used to verify accounting reports and statements are referred to as

Correct AnswerverifiedB

Management myopia refers to managers who

Correct AnswerverifiedShow Answer

The last step in the control process is to compare performance with the standard.

Correct AnswerverifiedShow Answer

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False

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B

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