Test #1: Chapter #2

Which of the following is not one of the four business processes? a.) performance measurement and management process b.) capital resource process c.) internal control process d.) business organization and strategy process

internal control process

Identify the item below that is considered non-value added time (when goods are non-actively being worked on): a.) time it takes for customer to order goods b.) time it takes to process an order c.) time it takes to ship the order d.) all of the above are non-value added time

all of the above are non-value added time

When a company operates in a more certain environment it tends to focus inward and have a: a.) flexible strategy b.) rigid strategy c.) loose strategy d.) efficiency strategy

efficiency strategy

Activities involving obtaining necessary funds to purchase long-term assets, repay existing obligations, and provide a return for owners are referred to as: a.) financing activities b.) operating activities c.) investing activities d.) planning activities

financing activities

Riga Corp borrowed $1,000,000 to buy a new manufacturing plant is part of their: a.) operating activities b.) financing activities c.) investing activities d.) planning activities

financing activities

The Capital Resources Process features which of the following pairs of activities? a.) operating and investing b.) financing and investing c.) reporting and operating d.) financing and planning

financing and investing

Activities involving the purchase and sale of long-term assets as well as other major items used in a business's operation are referred to as: a.) operating activities b.) investing activities c.) financing activities d.) planning activities

investing activities

Morland Corp purchased a building that will house its new manufacturing plant. This is part of Morland's: a.) operating activities b.) investing activities c.) financing activities d.) planning activities

investing activities

Which one of the following processes is responsible for purchase and sale of long-term investments? a.) capital resource process b.) operating process c.) investing process d.) business organization and strategy process

investing process

The cost and effectiveness of research and development is part of which of the following balanced scorecard perspectives? a.) financial perspective b.) learning and growth perspective c.) customer perspective d.) internal perspective

learning and growth perspective

All the checks used by Graphics, Inc. to pay its bills are prenumbered. This is an application of which of the following internal controls: a.) maintaining adequate documents and records b.) physically controlling assets and documents c.) requiring proper authorization d.) separating incompatible duties

maintaining adequate documents and records

Which of the following bank reconciliation items would require the case on the company's books to be reduced? a.) outstanding check b.) deposit in transit c.) non-sufficient funds check d.) bank error

non-sufficient funds check

The profit making activities of an enterprise are referred to as: a.) financing activities b.) planning activities c.) operating activies d.) investing activities

operating activities

When a company operates in an uncertain environment that has rapidly changing products, it is more likely to have a(n): a.) mechanistic organizational structure with an efficiency strategy b.) organic structure with a flexible strategy c.) holistic organizational structure with an organic strategy d.) synthetic organizational structure with a decentralized strategy

organic organizational structure with a flexible strategy

On a bank reconciliation, which of the following will reduce the bank's cash balance? a.) outstanding check b.) deposit in transit c.) non-sufficient funds check d.) failure of the company to record the correct amount of the check on the company's records

outstanding check

Which of the following is not considered a subprocess of the Operating Process? a.) conversion b.) performance c.) marketing/sales/collection/customer service d.) purchasing/human resources/payment

performance

The Balanced Scorecard Approach is part of which of the following processes? a.) operating process b.) capital resources process c.) performance measurement and management process d.) business organization and strategy process

performance measurement and management process (balanced scorecard approach: performance metric used in strategic management to identify and improve various internal functions of a business and their resulting external outcomes)

A burger shop requires employees to ring up sales and place all cash receipts in the cash register. This is an application of which of the following internal controls: a.) requiring proper authorization b.) separating incompatible duties c.) physically controlling assets and documents d.) maintaining adequate documents and records

physically controlling assets and documents

Which of the following is considered value added time (processes that improve products)? a.) order response time b.) production time c.) queue time d.) shipping time

production time

Which of the following measure the liquidity of a company? a.) return on owners' equity b.) gross margin ratio c.) return on investment d.) quick ratio

quick ratio

Which of the following ratios measures the profitability of the money invested in the firms' assets? a.) quick ratio b.) return on owners' equity c.) gross margin ratio d.) return on investment

return on investment

The bookkeeper who records cash receipts also deposits daily cash receipts at the bank on his way home from work. This is a violation of which of the following characteristics of good internal control: a.) requiring proper authorization b.) maintaining adequate documents and records c.) physically controlling assets and documents d.) separating incompatible duties

separating incompatible duties