MGMT 3000 Ch 14

The ratios that assess the ease with which the assets of the organization can be converted into cash are

liquidity ratios

Which of the following statements about financial audits is true?

1) they are independent appraisals 2) they may be internal or external to the organization 3) they may be used to monitor accounting, financial, and operation systems within an organization 4) they many be conducted on a continual or an intermittent basis ALL OF THESE

Which of the following statements does NOT describe a weakness associated with budgeting?

Budgets link planning and controlling.

You have a banker reviewing a loan application from a local business. Which of the following ratio would you look at to get a quick measure of the business's ability to meet its long-term financial obligations?

Debt Ratio

Retained earnings are part of ______ control of an organization.

Financial

Which type of financial statement summarizes the organization's revenues and expenses over the previous year?

Income Statement

Stephanie makes handcrafted jewelry. She knows her inventory and how long it takes her to make each piece of jewelry. She knows how many days she has to fill an order. She is making a ______ budget.

Labor

Maintaining the optimal amount of inventory is part of ______ control.

Physical

American Greeting Corp. reported that its "sales have been hurt by people increasingly using the Internet to communicate" and by "lower-priced competition including Hallmark's Warm Wishes line of 99-cent card." As a result, it decided to lay off 13 percent of its full-time workforce. This need for cost-cutting measures would have been detected by its ______ system.

Strategic control

All of the following are characteristics of an effective control system EXCEPT

developed and implemented by top management