ACCT 3300 Ch 9(7)

Which of the following cycles does not have accounting information recorded into the required general ledger reporting system? A. Expenditure. B. Production. C. Planning. D. Revenue.

A. Expenditure. B. Production. C. Planning.

An organization's policies and procedures are part of its overall system of internal controls. The control function performed by policies and procedures is A. Feedforward control. B. Implementation control. C. Feedback control. D. Application control.

A. Feedforward control.

What is strategic planning? A. It establishes the general direction of the organization. B. It establishes the resources that the plan will require. C. It establishes the budget for the organization. D. It consists of decisions to use parts of the organization's resources in specified ways.

A. It establishes the general direction of the organization.

Which of the following is an example of an outcome of strategic planning? A. A formal statement of the organization's definition of the fundamental truths that guide its actions. B. A broad statement of concepts that emphasizes the implementation of organizational objectives over the long term. C. A set of general guides for action that channel thinking and allow a certain amount of discretion in execution. D. A document specifying a sequence of steps detailing the exact manner in which a certain activity must be accomplished.

B. A broad statement of concepts that emphasizes the implementation of organizational objectives over the long term.

The management of an organization has stated that two members of the same family may not be employed in the same department. Identify the component of organizational planning that is being demonstrated by management's action. A. A strategy. B. A policy. C. An objective. D. A mission statement.

B. A policy.

Which one of the following management considerations is usually addressed first in strategic planning? A. Outsourcing. B. Overall objectives of the firm. C. Organizational structure. D. Recent annual budgets.

B. Overall objectives of the firm.

During the strategic planning process, which one of the following is an external factor to be analyzed? A. Organizational culture. B. Societal culture. C. Employee morale. D. Organizational structure.

B. Societal culture.

Formal written policies are normally recommended. However, the presence of certain conditions in an organization minimizes the need for written policies. One condition that minimizes the need for written policies is a A. High division of labor. B. Strong organizational culture. C. Large span of control. D. Strict unity of command.

B. Strong organizational culture.

Strategy is a broad term that usually means the selection of overall objectives. Strategic analysis ordinarily excludes the A. Trends that will affect the entity's markets. B. Target product mix and production schedule to be maintained during the year. C. Forms of organizational structure that would best serve the entity. D. Best ways to invest in research, design, production, distribution, marketing, and administrative activities.

B. Target product mix and production schedule to be maintained during the year.

A company has a compensation system for its managers based on a management-by-objectives (MBO) approach. The essential premise of MBO is that A. Compensation should be based on qualitative factors. B. Employees should be concerned with routine matters, and managers should attend to exceptions. C. Employees should participate in setting objectives. D. Managers should establish objectives for their employees.

C. Employees should participate in setting objectives

A distinction between forecasting and planning A. Is not valid because they are synonyms. B. Arises because forecasting covers the short-term and planning does not. C. Is that forecasts are used in planning. D. Is that forecasting is a management activity whereas planning is a technical activity.

C. Is that forecasts are used in planning.

All of the following are characteristics of the strategic planning process except the A. Emphasis on long run. B. Analysis of external economic factors. C. Review of the attributes and behavior of the organization's competition. D. Analysis and review of departmental budgets.

D. Analysis and review of departmental budgets.

Strategic planning, as practiced by most modern organizations, includes all of the following except A. Top-level management participation. B. A long-term focus. C. Strategies that will help in achieving long-range goals. D. Analysis of the current month's actual variances from budget.

D. Analysis of the current month's actual variances from budget.

MBO managers are most likely to believe that employees A. Dislike their work. B. Avoid responsibility whenever possible. C. Work best when threatened with punishment. D. Are self-motivated.

D. Are self-motivated.

A company is anticipating that a major supplier might experience a strike this year. Because of the nature of the product and emphasis on quality, extra production cannot be stored as finished goods inventory. When developing a contingency budget that would anticipate a direct materials buildup, the two most significant items that will be affected are A. Production volume and direct material. B. Sales and ending inventory. C. Production and cash flow. D. Direct materials and cash flow.

D. Direct materials and cash flow.

A company has established a strategic initiative to increase operating income by increasing market share through being the lower-cost provider. Assuming the total market size remains the same, and based on the information provided below, has the company achieved the stated objectives? Current Year Next Year Revenues $325,000 $325,000 Cost of goods sold 152,000 146,000 Gross margin $173,000 $179,000 Operating costs Marketing 100,000 100,000 Administrative 50,000 50,000 Operating income $ 23,000 $ 29,000 Units sold 1,000 1,000 A. Yes, because the company was able to lower costs and increase operating income. B. No, because the company did not reduce marketing and administrative costs. C. Yes, because the statements show a reduced cost of goods sold. D. No, because it does not appear that the company has increased market share.

D. No, because it does not appear that the company has increased market share.