accounting 3

Which of the following statements is correct?

If total cash available for the year exceeds total cash disbursements for the year, a company may still need to borrow cash during the year.

In regards to preference decisions,

It is difficult to compare investments based on their net present values

Which of the following is false regarding the payback method?

The payback method takes the time value of money into account.

Which of the following statements is false?

The simple rate of return method focuses on cash flows instead of net operating income

Which of the following statements is correct? Return on Investment and Residual Income are two methods used to evaluate the performance of cost centers. The manager of a profit center has control over costs, revenues, and investments. In a decentralized organization, decision-making authority is held only by top managers. The term responsibility center is used for any part of an organization whose manager has control over and is accountable for cost, profit, or investments.

The term responsibility center is used for any part of an organization whose manager has control over and is accountable for cost, profit, or investments.

Demand for a product is elastic if:

a change in price has a substantial effect on unit sales

Responsibility accounting is:

a system in which managers are held responsible for only those items over which they exert significant control

Typical cash inflows and outflows associated with a capital investment project include the following except: costs reduced by using the new asset purchase price of the new asset opened operating costs of the new asset depreciation expense on the new asset purchased

depreciation expense on the new asset purchased

Which of the following is not a benefit of budgeting?

ensuring the company is profitable

Companies use target costing for the following reasons except:

it enables the company to charge the profit-maximizing price

Capital budgeting involves the following decisions except: lease or buy decisions make or buy decisions expansion decisions cost reduction decisions

make or buy decisions

Which of the following items should a company include in the cash budget as cash disbursements?

option c (no, yes, yes)

Balanced scorecard performance measures fall into the following categories except: internal business process customer learning and growth product quality

product quality

Of the following budgets, which budget is prepared first?

production budget

Which of the following statements is correct? a manager who is evaluated based on return on investment (ROI) will always accept investments that are good for the company overall if an investment has positive residual income, the investment has a lower return than the minimum required rate of return. residual income should not be used to compare the performance of divisions of different sizes if Division A's ROI is higher than Division B's ROI, it is not an indication that Division A is better managed.

residual income should not be used to compare the performance of divisions of different sizes

The profit-maximizing price for a product is based on:

the price elasticity of demand

When producing cell phones, which of the following activities would be considered to be value-added time? time spent moving the phones' raw materials from one assembly station to the next. time spent assembling the phones time spent inspecting the phones for defective batteries time spent waiting for raw materials for the phones' screens to arrive

time spent assembling the phones

Which of the following is not an advantage of decentralization? top managers can focus on operating details instead of overall strategy lower level managers get better experience and training lower level managers have higher job satisfaction organizations can respond more quickly to customers and changes in their operating environment.

top managers can focus on operating details instead of overall strategy