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27 Cards in this Set
- Front
- Back
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Which of the following statements is correct?
A. A dominant goal of a non profit organization is to earn a profit. B. Most NPO have individuals with significant professional expertise and mgmt at the helm. C. The absence of a satisfactory quantitative overall measure of performance is a major mgmt control problem D. All of the above E. Only b and c |
c. The absence of a satisfactory quantitative overall measure of performance is a major mgmt control problem
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some of the special characteristics of health care org are
a. they are dealing with a difficult social problem b. there has been a significant change in the mix of providers c. the prevalence of third-party payers d. all of the above only b and c above |
d. all of the above
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The costs of many Service org are
a. essentially variable in the short run b. essentially fixed in the short run c. essentially mixed in the short run d. essentially varies with machine hours e. none of the above |
b. essentially fixed in the short run
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Internal control can:
a. provide total assurance regarding achieving the firm's objectives b. provide no assurance regarding achieving the firm's objectives c. provide reasonable assurance regarding achieving the firm's objectives in certain areas d. make a firm successful always |
c. provide reasonable assurance regarding achieving the firm's objectives in certain areas
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Service organizations are similar to for profit manufacturing org with respect to:
a. Pricing, budgeting, cost allocations and responsibility centers b. pricing, performance measurement control c. budgeting, compensation, and transfer pricing d. None of the above e. All of the above |
a. Pricing, Budgeting, cost allocations and responsibility centers
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the essentials of mgmt control systems in service org are:
a. different from manufacturing org because of "no inventory" b. are essentially similar to other types of org c. are easier to implement compared to manufacturing org d. none of the above |
a. different from manufacturing org because of "no inventory"
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In NPO:
a. program decisions are more subjective b. the budget is the most important mgmt control mechanism for financial activities c. it is difficult to know what the optimum operating costs are d. all of the above |
d. all of the above
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Performance evaluation in Professional service Org
a. is easy because you can see that higher paid consultants are generally considered to be of better quality b. is easy because you can establish input output relations c. is superior because the firms can easily use ROI d. is difficult because output and performance are difficult to evaluate e. none of the above |
d. is difficult because output and performance are difficult to evaluate
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Budge lapsing is:
a. easily controllable in govt org b. easily controllable in he service sector c. is likely to be more prevalent in the govt sector because of legal issues d. all of the above |
c. is likely to be more prevalent in the govt sector because of legal issues
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MGMT control systems in govt in practice are
a. likely to be more effective because they are revised periodically b. likely to be more effective because they are governed by well established laws c. likely to be more effective because they are monitored closely by voters d. None of the above e. all of A, B, C |
D. None of the above
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Which of the following is true for financial services org
a. can now operate only in one segment - investment banking b. can now operate in multiple segments because of the Clinton initiative c. can now operate in multiple segments because of the IT industry d. now operate in multiple segments such as commercial banking, investment banking, and are also global in scope e. none of the above |
d. now operate in multiple segments such as commercial banking, investment banking, and are also global in scope
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Internal control components include:
a. risk assessment, monitoring, and internal auditors b. risk assessment, control environment, and monitoring c. risk assessment, board of directors, and accountants d. none of the above |
b. risk assessment, control environment, and monitoring
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Large corporations use budgets to:
a. assign decision rights b. communicate information, both horizontally and vertically c. set goals and measure performance d. all of the above |
d. all of the above
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Budget racheting refers to:
a. setting this year's target using the average of the last three year's actual performance b. setting this year's target based on a complete independent review of operations c. setting this year's target based on last year's actual performance, usually tightening standards d. the practice of managers spending significantly more moneys in the last month of the year |
c. setting this year's target based on last year's actual performance, usually tightening standards
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Budget lapsing refers to:
a. setting this year's target using the average of the last three year's actual performance b. setting this year's target based on a complete independent review of operations c. setting this year's target based on last year's actual performance, usually tightening standards d. the practice of managers spending significantly more moneys in the last month of the yeara. setting this year's target using the average of the last three year's actual performance b. setting this year's target based on a complete independent review of operations c. setting this year's target based on last year's actual performance, usually tightening standards d. the practice of managers spending significantly more moneys in the last month of the year |
d. the practice of managers spending significantly more moneys in the last month of the financial year
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A top down imposed budget:
a. is always better than participative budgeting b. is always inferior to participative budgeting c. works as well as participative budgeting in situations where the level of complexity and uncertainty in operations are relatively low d. is often used in large corporations that have very complex operations and a high degree of uncertainty regarding demand |
c. works as well as participative budgeting in situations where the level of complexity and uncertainty in operations are relatively low
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A company interested in minimizing cash outflows due to taxes should
a. should decentralize transfer pricing policy setting b. should charge a high transfer price for goods sent out from high income tax countries c. should charge a low transfer price for goods sent out from high income tax countries d. should charge a high transfer price for goods being sent to countries with high import duties e. none of the above |
d. should charge a high transfer price for goods being sent to countries with high import duties
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International transfer pricing policies
a. do not have any role in influencing performance evaluation for foreign subsidiaries b. can lead to distortions in performance evaluation for foreign subsidiaries c. need to be not centralized but decentralized to eliminate performance evaluation issues d. both a and c are correct e. both b and c are correct |
e. both b and c are correct
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Additional factors that firms may consider in International transfer pricing issues are
a. the role of income taxes b. the role of import duties c. other factors such as country specific laws, rules and regulations, etc d. A and B above e. A,B, C above |
e. a, b, c above
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Under conditions where some countries limit the amount of foreign exchange available to import certain commodities, a lower transfer price allows
a. the subsidiary to bring in less of these commodities b. the subsidiary to bring in more of these commodities c. has no effect on the quantity of commodities brought in d. leads to more taxes |
b. the subsidiary to bring in less of these commodities
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Under section 482 of the IRC, acceptable intercompany pricing methods listed in descending order of priority are as follows
a. cost plus method, resale price method, comparable uncontrolled price b. resale price method, cost plus method, comparable uncontrolled price c. comparable uncontrolled price, resale price method, cost plus method d. none of the above |
c. comparable uncontrolled price, resale price method, cost plus method
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International Transfer Pricing problems, particularly relating to Performance evaluation of independent responsibility centers
A. Are not important B. Can be easily solved by centralizing International Transfer pricing policies in a firm C. Can be minimized if each responsibility center is given full freedom to source and price D. Cannot be easily resolved, particularly if minimizing taxes is of top priority for the firm E. Both C and D are correct. |
E. Both C and D are correct.
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The statement “Budgets are bad for business”
A. Is correct B. Is meant more to highlight a catchy slogan C. Is expressed in the context that budgets constrain employee thinking to focus just on set targets and not anything beyond that D. Is an expression of Economic Darwinism |
C. Is expressed in the context that budgets constrain employee thinking to focus
just on set targets and not anything beyond that |
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Research on Slack in Budgeting shows that
A. Slack should never be allowed to be built in B. Employees build in slack anyway even if a firm discourages it C. Some amount of slack motivates better performance D. Both A and C are correct E. B and C are correct |
E. B and C are correct
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Stretch Targets are
A. Widely used in practice B. Are better than conventional targets set using normal budget procedures C. Need to be used with caution and not for regular performance evaluations D. All of the above |
C. Need to be used with caution and not for regular performance evaluations
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When a country’s currency suffers from high inflation, firms should:
A. Keep their profits in that country longer B. Charge a low transfer price for goods being sent to that country and take their money out later C. Charge a high transfer price for goods being sent to that country and take their money out at the earliest D. Inflation should have no effect on a firm’s Transfer pricing policies |
C. Charge a high transfer price for goods being sent to that country and take their
money out at the earliest |
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Managers of profit centers are concerned about Transfer prices because
A. They always care about the firm B. They care about helping other divisions to make profits C. It could affect their own performance evaluation D. The assumption in the question that “managers of profit centers are concerned about Transfer prices” is not correct. |
C. It could affect their own performance evaluation
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