Management-3140: final exam- chapter 16
False
A balanced scorecard is a control system combining four sets of performance measures: technological, customer feedback, productivity, and strategy.
D. financial picture at a given time.
A company's balance sheet shows its: A. areas of improvement. B. projected profit. C. strengths, weaknesses, and threats. D. financial picture at a given time. E. performance over time.
True
A control system cannot be effective without consideration of how people will react to it.
D. exception
A managerial principle stating that control is enhanced by concentrating on the significant deviations from the expected result or standard is referred to as the principle of ____. A. control B. concentration C. progression D. exception E. standardization
True
A master budget includes every major activity of a business.
C. return on investment
A ratio of profit to capital used, or a rate of return from capital, is referred to as ____. A. the debt-equity ratio B. the leverage ratio C. return on investment D. net working capital E. transfer price
B. balance sheet
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity is referred to as a(n) ____. A. profit and loss statement B. balance sheet C. expense report D. income statement E. budget report
True
A transfer price is the price charged by one unit for a good or service provided to another unit within the organization.
C. standard
A(n) _____ is the level of expected performance for a given goal; it is a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed. A. goal B. objective C. standard D. control process E. audit
False
According to the principle of exception, even the smallest of deviations from the standard require corrective action.
True
Activity-based costing is a method of cost accounting designed to allocate costs across particular business processes according to the amount of time employees devote to particular activities.
A. external
An evaluation conducted by one organization on another organization is referred to as a(n) _____ audit. A. external B. competitive C. comparative D. intrinsic E. parallel
B. management
An evaluation of the effectiveness and efficiency of various systems within an organization is called a(n) _____ audit. A. human resource B. management C. activity-based D. budget E. six-sigma
False
An example of feedforward control is managers monitoring their distributors
E. profit and loss statement
An itemized financial statement of the income and expenses of a company's operations is called the ____. A. statement of financial ratios B. balance sheet C. cash flow statement D. assets and liabilities statement E. profit and loss statement
False
As long as supervisors monitor behavior constantly, the feedback may be given at any point in time without consequence.
C. feedforward
At Performance Instruments, all assembly workers must wear specialized gear to reduce possible injuries from minute particles in the manufacturing environment. This requirement best reflects _____ control. A. feedback B. proactive C. feedforward D. reactive E. concurrent
False
Authority and organizing are called the Siamese twins of management
False
By definition, management audits are internal, not external.
C. market
Control based on the use of pricing mechanisms and economic information to regulate activities within organizations is referred to as _____ control. A. clan B. feedback C. market D. feedforward E. bureaucratic
A. planning
Control has been called one of the Siamese twins of management. The other twin is ____. A. planning B. organizing C. leading D. directing E. empowerment
True
Control is defined as any process that directs the activities of individuals toward the achievement of organizational goals
True
Control is one of the forces that keeps an organization heading in the right direction.
C. feedback
Control that focuses on the use of information about previous results to correct deviations from the acceptable standard is referred to as _____ control. A. feedforward B. preliminary C. feedback D. audit E. performance
D. activity-based costing
Core Rentals has begun a new system of allocating costs according to the tasks their employees perform and the amount of time they spend on the particular tasks. This practice adopted by Core Rentals is referred to as ____. A. unit-based accounting B. time-based auditing C. task accounting D. activity-based costing E. allocation costing
False
Formal bureaucratic control systems continue to be the most effective in organizations.
False
Ideally, a transfer price should be less than the price that the receiving business unit would have to pay for that product or service in the marketplace.
True
If an employee believes his or her control system is overly controlling, that employee is likely to exhibit dysfunctional behavior.
False
If bureaucratic and market mechanisms are insufficient for directing a company's workforce in today's environment, it can turn to structural control
True
If managers create a strong culture of correct behavior, then clan control can be a very effective control tool.
B. economic forces.
In contrast to bureaucratic controls, market controls involve the use of: A. rules and regulations. B. economic forces. C. authority. D. autocratic power. E. norms.
False
In contrast to market controls, bureaucratic controls involve the use of economic forces to regulate performance.
True
In large diversified companies, market controls are often used to regulate independent business units.
A. set performance standards that employees view as possible to achieve.
In order to gain employee acceptance of a control system, managers should: A. set performance standards that employees view as possible to achieve. B. tell employees that they need not necessarily use the standards. C. focus on controlling negative behavior than enforcing positive behavior. D. set standards low enough that all employees can easily meet them. E. make their own decisions while setting performance standards.
False
In today's complex organizations, the budget process is much more likely to be top-down.
True
Point-of-sale terminals in store checkout lines sending sales data back immediately to a retailer's headquarters is an example of how information technology has improved concurrent control.
B. accounting audits
Procedures used to verify accounting reports and statements are referred to as ____. A. lean accounting B. accounting audits C. activity-based costing D. accounting reforms E. budget audits
True
Return on investment is a profitability ratio.
B. Market control
Scenario A. Carlos is doing some management consulting for three companies. Powertech is a large corporation that was established in the 1950s. It produces chemical concentrates for industrial cleaning. The organization uses a strict set of rules and regulations with its workforce and tracks a large amount of data using statistical techniques. Mid-Atlantic Health is a network of regional medical centers that was started 15 years ago. Its management uses a control system that ties salaries to prevailing salary standards, and the center directors are evaluated on the basis of the profitability of their centers. Resources are moved between centers on the basis of transfer prices. Purple Lotus is a software company. Its control process is very future oriented. It likes to prevent problems before they arise, using policies, procedures, and rules. Which of the following control systems does Mid-Atlantic Health utilize? A. Bureaucratic control B. Market control C. Clan control D. Feedforward control E. Concurrent control
B. concurrent
The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed, is referred to as _____ control. A. feedforward B. concurrent C. feedback D. preliminary E. market
C. leverage
The debt-equity ratio is an example of a _____ ratio. A. net working capital B. profitability C. leverage D. current E. liquidity
C. empowerment
The effective use of clan control is associated with employee ____. A. bureaucracy B. manipulation C. empowerment D. dissatisfaction E. unionization
A. taking corrective action.
The final step in the control process is: A. taking corrective action. B. setting performance standards. C. measuring performance. D. comparing performance with standards. E. determining deviations.
True
The first step in the control process is to set performance standards.
A. changes in the employment relationship.
The increasing need for clan control is caused by the: A. changes in the employment relationship. B. unchanging nature of management. C. changes in the economic environment. D. changes in government regulations. E. unchanging nature of employees' jobs.
False
The last step in the control process is to compare performance with standards
True
The most common type of tactical behavior in control systems is to manipulate information or report false performance data
False
The most effective performance standards tend to be subjective rather than objective
B. transfer
The price charged by one unit for a good or service provided to another unit within the organization is referred to as a(n) _____ price. A. substitute B. transfer C. department D. organizational E. budget
C. budgeting
The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences is referred to as ____. A. activity-based costing B. budgetary auditing C. budgeting D. financial audits E. budget planning
True
The profit and loss statement is an itemized financial statement of the income and expenses of a company's operations.
False
The second step in a typical control process is comparing performance with the standard.
B. bureaucratic
The use of rules, regulations, and authority to guide performance is referred to as _____ control. A. clan B. bureaucratic C. market D. authentic E. autonomous
True
Three key categories of financial ratios are liquidity, leverage, and profitability.
D. use multiple control approaches.
To be effective, control systems must: A. keep performance standards flexible and easy. B. focus on one-way top-down communication. C. be acceptable to all stockholders. D. use multiple control approaches. E. centralize decision making.
True
Traditional methods of cost accounting tend to be inappropriate in today's business environment because they are based on outdated methods of rigid hierarchical organization.
C. bureaucratic control
Using budgeting, statistical reports, and performance appraisals to regulate behavior and results is considered a component of ____. A. clan control B. market control C. bureaucratic control D. financial audits E. management audits
True
Using the six sigma approach to quality does not always lead to improvements in the bottom line.
False
When supervisors monitor employee behavior, they are exercising feedback control.
C. Assets, liabilities, and stockholder's equity
Which of the following are the basic elements of a balance sheet? A. Income, expenses, and outcome B. Operations, sales, and growth C. Assets, liabilities, and stockholder's equity D. Receipts, deductions, and taxes E. Budgets, controls, and corrective actions
C. It indicates management's ability to generate a financial return on sales or investment.
Which of the following best describes the use of profitability ratios? A. It shows the relative amount of funds in the business supplied by creditors and shareholders. B. It indicates a company's ability to pay short-term debts. C. It indicates management's ability to generate a financial return on sales or investment. D. It shows the profit margins for the last six months. E. It indicates the future profits from the current customer base.
B. Profit and loss statement
Which of the following can be drawn tentatively and used as a goal against which actual performance can be measured? A. Statement of cash flow B. Profit and loss statement C. Balance sheet D. External audit E. Capital budget
C. Feedforward control
Which of the following controls is future oriented and aims to prevent problems before they arise? A. Feedback control B. Proactive control C. Feedforward control D. Reactive control E. Concurrent control
D. Feedforward control
Which of the following controls takes place before operations begin? A. Feedback control B. Clan control C. Initial control D. Feedforward control E. Concurrent control
C. Personal observation
Which of the following is a commonly used source for obtaining performance data? A. Competitors B. Human resource department C. Personal observation D. Upper management E. Technical analysts from outside the company
C. Lack of periodic reviews
Which of the following is a symptom of an out-of-control company? A. Flexible work hours for employees B. Highly challenging organizational goals C. Lack of periodic reviews D. Highly rigid work culture E. Lack of new employees
A. Inflexible behavior
Which of the following is an outcome of bureaucratic controls? A. Inflexible behavior B. Decentralized decision making C. Boundarylessness D. Empowered workforce E. Innovation and creativity
E. Time used
Which of the following is one of the factors based on which performance standards can be set? A. Efficiency B. Knowledge C. Market share D. Employee satisfaction E. Time used
B. Setting standards
Which of the following is the first major step in the formal control process? A. Comparing performance with standards B. Setting standards C. Taking corrective action D. Developing values E. Measuring performance
B. Economic measures do not adequately reflect the complete value of an organization.
Which of the following is the most pertinent argument against market control mechanisms? A. They rely too heavily on rules and procedures. B. Economic measures do not adequately reflect the complete value of an organization. C. They are too dependent on organization culture. D. Hierarchical structure is the only valid way to determine the future success of an organization. E. Decision making and power are too centralized when they are in use.
D. It indicates how often defects in a process are likely to occur.
Which of the following statements about six sigma is true? A. The system was developed at Ford during the 1970s. B. The lower the sigma number, the lower the level of defects. C. It is designed merely to reduce product defects. D. It indicates how often defects in a process are likely to occur. E. Six sigma always improves the bottom line.
False
With bureaucratic control, business units are treated as profit centers, and their managers are evaluated based on profit and loss
D. tactical behaviors
Yiheng was new to his organization but quickly noticed a pattern at the annual budgeting session. Mid-level managers were asking for unrealistically high budgets, while top management was attempting to request budgets under last year's actual expenditures. Both parties were using strategies that are referred to as ____. A. budget breakdowns B. bureaucratic budgeting C. budget resistance D. tactical behaviors E. rigid behaviors
D. Production
_____ budget is commonly expressed in physical units, and it can be prepared with information including types and capacities of machines, economic quantity, and availability of materials. A. Master B. Cash C. Capital D. Production E. Sales
C. Capital
_____ budget is used for the cost of fixed assets, such as plants and equipment, that are usually treated not as regular expenses but as investments. A. Master B. Cash C. Capital D. Production E. Sales
E. Clan
_____ control involves creating relationships based on mutual respect and encouraging each individual to take responsibility for his or her actions. A. Autocratic B. Centralized C. Bureaucratic D. Cultural E. Clan
B. Concurrent control
_____ is in effect when supervisors watch employees to ensure they work efficiently and avoid mistakes. A. Organizational modification B. Concurrent control C. Management adjustment D. Feedback control E. Feedforward control
B. Current
_____ ratio is a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities. A. Debt-equity B. Current C. Profitability D. Return on investment E. Stockholders' equity
True
Because financial ratios usually are expressed in compressed time horizons, they often cause management myopia.
False
Budgeting information is confined to finances.
False
Clan control assumes that the interests of organizations and individuals naturally diverge
True
Clan control is control based on the norms, values, shared goals, and trust among group members.
True
Concurrent control takes place while plans are being carried out.
A. clan
Control based on the norms, values, shared goals, and trust among group members is referred to as _____ control. A. clan B. feedback C. concurrent D. feedforward E. market
B. concurrent
Electronic monitoring of telemarketers' conversations with potential clients is an example of _____ control. A. feedback B. concurrent C. preliminary D. clan E. feedforward
A. the nature of management has changed.
Empowerment is important in organizations today because: A. the nature of management has changed. B. employees' jobs have become less challenging. C. employees are more concerned about pay. D. labor unions are growing. E. of the increasing role of technology.
D. investigating possible targets for mergers or acquisitions.
External audits are generally used for: A. assessing what the company has done for itself. B. evaluating production efficiency. C. evaluating sales effectiveness. D. investigating possible targets for mergers or acquisitions. E. assessing what the company has done for its customers.
True
External audits are often used for feedback control but can also be useful to prevent problems
D. the principle of exception.
Jeremy is in charge of production at Tech Farm Equipment. His job responsibilities include eliminating defects in the equipment parts the factory produces. However, he has advised his crew to alert him only when defects exceed 200 per million, which he considers a serious deviation from standards. In this case, Jeremy is using: A. a management audit. B. the principle of deviation. C. clan control. D. the principle of exception. E. behavioral standards.
B. Cash budget
Kate is a financial manager at Nature Feeds, a manufacturer of cattle feed. She makes a budget that shows the anticipated receipts and expenses of the company. The budget also shows her the amount of working capital available and whether the company will need loans. This is the last budget that Kate creates for the upcoming year. Which of the following types of budget is exemplified in this scenario? A. Master budget B. Cash budget C. Cost production budget D. Production budget E. Sales budget
A. the relative amount of funds in the business supplied by shareholders.
Leverage ratios indicate: A. the relative amount of funds in the business supplied by shareholders. B. a company's ability to pay short-term debts. C. management's ability to generate a financial return on sales or investment. D. the profit margins for the last six months. E. the future profits from the current customer base.
False
Liabilities are the amounts accruing to the corporation's owners.
False
Liquidity ratios indicate a company's ability to meet its long-term financial obligations.
A. ability to pay short-term debts.
Liquidity ratios indicate a company's: A. ability to pay short-term debts. B. ability to generate a financial return on sales. C. relative amounts of funds supplied by creditors. D. ability to meet its long-term financial obligations. E. profitability and leverage ratios.
B. limit their focus to short-term profits at the expense of longer-term strategic obligations.
Management myopia occurs when managers: 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 strategic obligations. C. find themselves unable to rise beyond a certain level in the organizational hierarchy. D. are promoted beyond their level of competence. E. find it hard to progress within an organization due to corporate downsizing or paring of middle management layers.
D. net working capital
Maria has just reviewed a number of indicators of financial control for her firm. One that worries her indicates that the company may soon have trouble making loan payments and clearing its current accounts receivables. In this case, Maria is concerned about the _____ ratio. A. profit and loss B. profitability C. leverage D. net working capital E. return on investment
True
Market control is control based on the use of pricing mechanisms and economic information to regulate activities within organizations.
False
Market control is the use of rules, regulations, and formal authority to guide performance
D. stockholders' equity
On the balance sheet, the amount accruing to a corporation's owners is referred to as ____. A. a liability B. transfer price C. an asset D. stockholders' equity E. return on investment
A. liabilities
On the balance sheet, the amounts a corporation owes to various creditors are referred to as ____. A. liabilities B. assets C. budgets D. diseconomies E. expenses
D. assets
On the balance sheet, the values of the various items a corporation owns are referred to as ____. A. liabilities B. debts C. budgets D. assets E. savings
True
One of the reasons standards are established is to set performance expectations
False
Performance standards can only be set with respect to quantity or quality
E. internal audits
Periodically assessing a company's own planning, organizing, leading, and controlling efforts is the essential function of ____. A. strategic audits B. feedforward control C. feedback control D. competitive audits E. internal audits
True
Personal observation involves going to the area where activities take place and watching what is occurring.
A. Bureaucratic control
Scenario A. Carlos is doing some management consulting for three companies. Powertech is a large corporation that was established in the 1950s. It produces chemical concentrates for industrial cleaning. The organization uses a strict set of rules and regulations with its workforce and tracks a large amount of data using statistical techniques. Mid-Atlantic Health is a network of regional medical centers that was started 15 years ago. Its management uses a control system that ties salaries to prevailing salary standards, and the center directors are evaluated on the basis of the profitability of their centers. Resources are moved between centers on the basis of transfer prices. Purple Lotus is a software company. Its control process is very future oriented. It likes to prevent problems before they arise, using policies, procedures, and rules. Which of the following control systems does Powertech utilize? A. Bureaucratic control B. Market control C. Clan control D. Democratic control E. Standard control
D. Feedforward control
Scenario A. Carlos is doing some management consulting for three companies. Powertech is a large corporation that was established in the 1950s. It produces chemical concentrates for industrial cleaning. The organization uses a strict set of rules and regulations with its workforce and tracks a large amount of data using statistical techniques. Mid-Atlantic Health is a network of regional medical centers that was started 15 years ago. Its management uses a control system that ties salaries to prevailing salary standards, and the center directors are evaluated on the basis of the profitability of their centers. Resources are moved between centers on the basis of transfer prices. Purple Lotus is a software company. Its control process is very future oriented. It likes to prevent problems before they arise, using policies, procedures, and rules.Which of the following control systems does Purple Lotus utilize? A. Feedback control B. Market control C. Clan control D. Feedforward control E. Concurrent control
B. Feedforward
Scenario B. A manager is having problems with employees not complying with the rules about clocking in and clocking out each day. If the employees fail to follow these rules, their pay would be affected. There are three suggestions being considered to address this problem. 1. There would be supervision at the entrance so that employees comply with the rules during shift changes. 2. Reports on employees not complying with the rules will be generated and such employees will be asked to take corrective measures. 3. A new procedure will be implemented that is easier for the employees to follow. Training will be conducted so that each employee knows the policy and the procedure before it is enacted Which of the following approaches to bureaucratic control is described in option 3? A. Feedback B. Feedforward C. Concurrent D. Market E. Clan
C. Concurrent
Scenario B. A manager is having problems with employees not complying with the rules about clocking in and clocking out each day. If the employees fail to follow these rules, their pay would be affected. There are three suggestions being considered to address this problem. 1. There would be supervision at the entrance so that employees comply with the rules during shift changes. 2. Reports on employees not complying with the rules will be generated and such employees will be asked to take corrective measures. 3. A new procedure will be implemented that is easier for the employees to follow. Training will be conducted so that each employee knows the policy and the procedure before it is enacted. Which of the following approaches to bureaucratic control is described in option 1? A. Feedback B. Feedforward C. Concurrent D. Market E. Clan
A. Feedback
Scenario B. A manager is having problems with employees not complying with the rules about clocking in and clocking out each day. If the employees fail to follow these rules, their pay would be affected. There are three suggestions being considered to address this problem. 1. There would be supervision at the entrance so that employees comply with the rules during shift changes. 2. Reports on employees not complying with the rules will be generated and such employees will be asked to take corrective measures. 3. A new procedure will be implemented that is easier for the employees to follow. Training will be conducted so that each employee knows the policy and the procedure before it is enacted. Which of the following approaches to bureaucratic control is described in option 2? A. Feedback B. Feedforward C. Concurrent D. Market E. Clan
A. Clan
Scenario C. Z-Tech is an organization that has undergone a dramatic transformation over the last few years. Earlier, employees were managed using a wide array of rules, regulations, and procedures. Offending employees were punished for their violations. Today, employees are encouraged to make decisions and come up with innovative solutions to problems they encounter. Most employees are much more satisfied under the new scenario. The group is much more cohesive and is committed not only to the overall success of the organization but also to its standards and reputation Which of the following types of control systems does the organization currently use? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward
C. Bureaucratic
Scenario C. Z-Tech is an organization that has undergone a dramatic transformation over the last few years. Earlier, employees were managed using a wide array of rules, regulations, and procedures. Offending employees were punished for their violations. Today, employees are encouraged to make decisions and come up with innovative solutions to problems they encounter. Most employees are much more satisfied under the new scenario. The group is much more cohesive and is committed not only to the overall success of the organization but also to its standards and reputation. Which of the following types of control systems did the organization most likely use in the past? A. Clan B. Market C. Bureaucratic D. Subjective E. Informal
B. Market
Scenario D. Matthew's organization has called a meeting regarding control systems. The top managers of the organization believe that the most important control system is one that is strict and focuses on the authority of top management. Additionally, they want to focus on budget control. Some of the middle-level managers support a control system that focuses on business units. They also want to outsource some of the company's finance processes to a different company. Finally, Matthew suggests that the company should empower its employees, create relationships based on mutual respect, and focus on the satisfaction of customers On which of the following control systems do the middle-level managers want to focus? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward
C. Bureaucratic
Scenario D. Matthew's organization has called a meeting regarding control systems. The top managers of the organization believe that the most important control system is one that is strict and focuses on the authority of top management. Additionally, they want to focus on budget control. Some of the middle-level managers support a control system that focuses on business units. They also want to outsource some of the company's finance processes to a different company. Finally, Matthew suggests that the company should empower its employees, create relationships based on mutual respect, and focus on the satisfaction of customers On which of the following control systems do the top managers want to focus? A. Clan B. Market C. Bureaucratic D. Democratic E. Informal
A. Clan
Scenario D. Matthew's organization has called a meeting regarding control systems. The top managers of the organization believe that the most important control system is one that is strict and focuses on the authority of top management. Additionally, they want to focus on budget control. Some of the middle-level managers support a control system that focuses on business units. They also want to outsource some of the company's finance processes to a different company. Finally, Matthew suggests that the company should empower its employees, create relationships based on mutual respect, and focus on the satisfaction of customers On which of the following control systems does Matthew want the organization to focus? A. Clan B. Market C. Bureaucratic D. Concurrent E. Feedforward
A. Balance sheet
Scenario E. Phil is the finance manager of Yellow Bus Inc., a communication and information technology corporation. His department is at present working on enforcing some financial controls on the organization. Phil assigns different tasks to his team members. Linda's task is to give him a present financial picture of the company. Eric's task is to give him the values of various items the company owns. Mark's task is to give him a report on the amount the company owes to various creditors. And finally, Lisa's task is to prepare a report on the amount accruing to the corporation's owners On which of the following would Linda be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement
D. Stockholders' equity
Scenario E. Phil is the finance manager of Yellow Bus Inc., a communication and information technology corporation. His department is at present working on enforcing some financial controls on the organization. Phil assigns different tasks to his team members. Linda's task is to give him a present financial picture of the company. Eric's task is to give him the values of various items the company owns. Mark's task is to give him a report on the amount the company owes to various creditors. And finally, Lisa's task is to prepare a report on the amount accruing to the corporation's owners. On which of the following will Lisa be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement
C. Liabilities
Scenario E. Phil is the finance manager of Yellow Bus Inc., a communication and information technology corporation. His department is at present working on enforcing some financial controls on the organization. Phil assigns different tasks to his team members. Linda's task is to give him a present financial picture of the company. Eric's task is to give him the values of various items the company owns. Mark's task is to give him a report on the amount the company owes to various creditors. And finally, Lisa's task is to prepare a report on the amount accruing to the corporation's owners. On which of the following will Mark be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement
B. Assets
Scenario E. Phil is the finance manager of Yellow Bus Inc., a communication and information technology corporation. His department is at present working on enforcing some financial controls on the organization. Phil assigns different tasks to his team members. Linda's task is to give him a present financial picture of the company. Eric's task is to give him the values of various items the company owns. Mark's task is to give him a report on the amount the company owes to various creditors. And finally, Lisa's task is to prepare a report on the amount accruing to the corporation's owners. On which of the following would Eric be working? A. Balance sheet B. Assets C. Liabilities D. Stockholders' equity E. Profit and loss statement
C. cost
The _____ budget is used for areas of an organization that incur expenses but no revenue, such as human resources and other support departments. A. sales B. production C. cost D. cash E. capital
C. provides a more accurate picture of how costs should be charged to products and services.
The activity-based costing system: A. is more appropriate method of cost accounting for rigid hierarchical organizations. B. effectively departmentalizes an organization based on its core functions such as human resources, purchasing, and maintenance. C. provides a more accurate picture of how costs should be charged to products and services. D. assumes that organizations are bureaucratic "machines" that can be separated into component functions. E. fails to allocate costs across business processes and is less effective than traditional methods of cost accounting.
False
The balance sheet shows the financial picture of a company over time.
