ACC- 500 Questions Set-1 Question No 1 In determining whether to purchase a labor saving machine, extreme resistance to the machine by employees

ACC- 500 Questions Set-1

Question No 1

In determining whether to purchase a labor −saving machine, extreme resistance to the machine by employees would be a(n) ________.

A.

relevant qualitative factor

B.

relevant quantitative factor

C.

irrelevant qualitative factor

D.

irrelevant quantitative factor

Question No 2

What is the sequence of steps in preparing the master budget?

A.4

Output from the financial budget is used to prepare the budgeted income statement.

B.1

Output from the financial budget is used to prepare the operating budget.

C.3

Output from the operating budget is used to prepare the financial budget.

D.2

Output from the financial budget is used to prepare the operating expense budget.

Question No 3

Wininger Company is preparing a cash budget for the month of June. The following information is available:

Cash Balance, May 31, 2015 $20,000

Cash collections from customers in June                                       46,000

Cash paid for merchandise in June                                                      42,000

Paid operating expenses in June                                                        12,000

Purchase furniture for cash in June                                           3,000

Depreciation expense in June                                                              2,000

Amortization expense in June                                                         4,000

The minimum cash balance desired is $10,000. What is the deficiency of cash before financing at June 30, 2015?

A.

$(11,000)

B.

$(7,000)

C.

$(1,000)

D.

$(3,000)

Question No 4

________ is the logical integration of techniques to gather and use data for planning and control decisions and to evaluate performance.

A.

A quality control system

B.

A management control system

C.

An internal control system

D.

A financial reporting system

Question No 5

Goal congruence exists when ________.

A.

the management control system reflects the organization’s goals

B.

employees respond to incentives created by a management control system and make decisions that help meet the goals of the organization

C.

performance reports are used constructively

D.

short−run goals and long−run goals are the same

Question No 6

What is a balanced scorecard and why are more companies using one?

What is a balanced scorecard?

A.

A performance report that contains measures of all the key financial and nonfinancial variables that are important for a company to prosper.

B.

A logical integration of techniques to gather and use information to make planning and controldecisions, to motivate employee behavior, and to evaluate performance.

C.

A measurement technique that focuses on prevention of defects and on achievement of customer satisfaction.

D.

A characteristic or attribute that must be achieved in order to drive the organization towards its goals.  

Why are more com

Why are more companies using a balanced scorecard?

A.

Companies find that it compares profit to investment using measures such as return on investment or residual income.

B.

Companies find that it is a useful tool to help managers focus on the multidimensional factors that make an organization successful.

C.

Companies find that it builds on the assumption that an organization minimizes the cost of quality when it achieves high quality levels.

D.

Companies find that it facilitates forecasting and budgeting and communicates results of actions across the organization.

Question No 7

What kinds of organizations find decentralization to be preferable to centralization?

A.

Profit-seeking organizations prefer decentralization because if a local manager makes poordecisions, the results will be less obvious.

B.

Decentralization is usually most successful in organizations where segments are relatively independent. If segments buy from or sell to one another, or if there are many common customers orsuppliers, decentralization is less likely to be desirable.

C.

Organizations with top managers who like to be involved in all decision-making are more likely to prefer decentralization.

D.

Decentralization is usually most successful in nonprofit organizations (where results can be measured more easily).

Question No 8

Which of the following statements about management control systems is FALSE?

A.

Profit−center managers always have more decentralized decision−making authority than

cost−center managers.

B.

The design of a management control system should consider the responsibilities of managers and the amount of autonomy they have.

C.

In designing management control systems, top managers must consider the system’s impact on the employee behavior desired by the organization.

D.

The management control system should be designed to achieve the best possible alignment between managerial effort and goal congruence.

Question No 9

How does economic profit differ from net income?

A.

The major difference is that economic profit includes a capital charge, that is, a cost of using all capital. In contrast, net income includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of economic profit rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

B.

The major difference is that net income includes a capital charge, that is, a cost of using all capital. In contrast, economic profit includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of net income rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

C.

The major difference is that net income includes a capital charge, that is, a cost of using all capital. In contrast, economic profit includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of economic profit rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

D.

The major difference is that economic profit includes a capital charge, that is, a cost of using all capital. In contrast, net income includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of net income rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

Question No 10

Which of the following departments is NOT a service department?

A.

laundry department in a hospital

B.

maintenance department in a hospital

C.

surgery floor in a hospital

D.

housekeeping department in a hospital

 

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