Question 1

The set of activities necessary to create and distribute a desirable product or service to a customer is known as:

Accepted Answer

A) A customer perspective. 
B) Business process perspective. 
C) Balanced scorecard. 
D) Value chain. 
A) A customer perspective. 
B) Business process perspective. 
C) Balanced scorecard. 
D) Value chain.

Question 2

Clancy Stores has sales of $1,574,000,cost of sales of $653,000,and operating expenses of $292,000.What is Clancy's return on sales?

Accepted Answer

A) 58.5%. 
B) 41.5%. 
C) 60%. 
D) 40%. 
A) 58.5%. 
B) 41.5%. 
C) 60%. 
D) 40%.

Question 3

Identify the criticisms of using ROI (Return on investment)as the only performance measure.

Accepted Answer

Return on investment provides a systemat

Question 4

A system that considers the earnings per sales dollar and the investment used to generate those sales dollars is called:

Accepted Answer

A) The economic value added system. 
B) The balanced scorecard system. 
C) The DuPont system. 
D) The residual income system. 
A) The economic value added system. 
B) The balanced scorecard system. 
C) The DuPont system. 
D) The residual income system.

Question 5

The return on investment is calculated by multiplying the capital turnover by the return on sales.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following measures the amount of sales dollars generated from each dollar of capital invested in assets?

Accepted Answer

A) Return on sales. 
B) Return on investment. 
C) Accounts receivable turnover. 
D) Capital turnover. 
A) Return on sales. 
B) Return on investment. 
C) Accounts receivable turnover. 
D) Capital turnover.

Question 7

In considering customer's needs,the balanced scorecard method will look at:

Accepted Answer

A) Market share growth and customer retention. 
B) Return on sales and sales turnover. 
C) Residual income and return on investment. 
D) Organizational procedures and information systems. 
A) Market share growth and customer retention. 
B) Return on sales and sales turnover. 
C) Residual income and return on investment. 
D) Organizational procedures and information systems.

Question 8

Which of the following is not one of the components of the DuPont system for measuring and evaluating business performance?

Accepted Answer

A) Return on sales. 
B) Return on investment. 
C) Inventory turnover. 
D) Capital turnover. 
A) Return on sales. 
B) Return on investment. 
C) Inventory turnover. 
D) Capital turnover.

Question 9

Which of the following accounting system characteristics cannot generate motivation?

Accepted Answer

A) Creating and setting goals. 
B) Measuring progress towards those goals. 
C) Allocating rewards towards goal achievement. 
D) Balancing debits and credits. 
A) Creating and setting goals. 
B) Measuring progress towards those goals. 
C) Allocating rewards towards goal achievement. 
D) Balancing debits and credits.

Question 10

Accounting systems do not offer any benefit to management in generating and focusing employee motivation.

Accepted Answer

A) True 
 B)False

Question 11

A stock option is a right to sell a certain number of shares at a specific price sometime in the future.

Accepted Answer

A) True 
 B)False

Question 12

Using only ROI as a business performance measure often leads to the best decisions.

Accepted Answer

A) True 
 B)False

Question 13

Calculate the residual income assuming the following information:

Accepted Answer

A) $156,000. 
B) $108,000. 
C) $219,000. 
D) $45,000. 
A) $156,000. 
B) $108,000. 
C) $219,000. 
D) $45,000.

Question 14

Return on investment (ROI)tells us how much earnings can be expected for the average invested dollar.

Accepted Answer

A) True 
 B)False

Question 15

Bonuses may be used to reward employees who meet performance goals.

Accepted Answer

A) True 
 B)False

Question 16

Dwyer Company's ROI is 6% and its return on sales is 16%.What is its capital turnover?

Accepted Answer

A) 3%. 
B) 37.5%. 
C) 300%. 
D) Some other percentage. 
A) 3%. 
B) 37.5%. 
C) 300%. 
D) Some other percentage.

Question 17

The Parry Company provided the following information regarding its operations: 2014 Total assets $500,000
2015 Total assets $550,000
2014 Net operating income $875,000
2015 Net operating income $925,000
2014 Net sales $2,525,000
2015 Net sales $3,100,000
What is Parry's ROI for the year ending 2015? (Round your answer to 2 decimal places.)

Accepted Answer

A) 1.50%. 
B) 2.72%. 
C) 1.76%. 
D) 1.82%. 
A) 1.50%. 
B) 2.72%. 
C) 1.76%. 
D) 1.82%.

Question 18

The following information regarding the Duncan Company is available:   Compute the answers for items A-D.

Accepted Answer

(A)$396,50

Question 19

How is the balanced scorecard used to identify,evaluate,and reward business performance?

Accepted Answer

The balanced scorecard uses four lenses

Question 20

Residual income can be defined as:

Accepted Answer

A) Income remaining after dividends are paid out. 
B) Operating earnings minus return on investment. 
C) Operating earnings plus a minimum acceptable return times average invested capital. 
D) Operating earnings minus a minimum acceptable return times average invested capital. 
A) Income remaining after dividends are paid out. 
B) Operating earnings minus return on investment. 
C) Operating earnings plus a minimum acceptable return times average invested capital. 
D) Operating earnings minus a minimum acceptable return times average invested capital.

Exam 25: Rewarding Business Performance

The set of activities necessary to create and distribute a desirable product or service to a customer is known as:

Clancy Stores has sales of $1,574,000,cost of sales of $653,000,and operating expenses of $292,000.What is Clancy's return on sales?

Identify the criticisms of using ROI (Return on investment)as the only performance measure.

A system that considers the earnings per sales dollar and the investment used to generate those sales dollars is called:

The return on investment is calculated by multiplying the capital turnover by the return on sales.

Which of the following measures the amount of sales dollars generated from each dollar of capital invested in assets?

In considering customer's needs,the balanced scorecard method will look at:

Which of the following is not one of the components of the DuPont system for measuring and evaluating business performance?

Which of the following accounting system characteristics cannot generate motivation?

Accounting systems do not offer any benefit to management in generating and focusing employee motivation.

A stock option is a right to sell a certain number of shares at a specific price sometime in the future.

Using only ROI as a business performance measure often leads to the best decisions.

Calculate the residual income assuming the following information:

Return on investment (ROI)tells us how much earnings can be expected for the average invested dollar.

Bonuses may be used to reward employees who meet performance goals.

Dwyer Company's ROI is 6% and its return on sales is 16%.What is its capital turnover?

The following information regarding the Duncan Company is available: Compute the answers for items A-D.

How is the balanced scorecard used to identify,evaluate,and reward business performance?

Residual income can be defined as:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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