Question 1

If return on investment is 15.5% and investment turnover is 0.7 times profit margin is:

Accepted Answer

A) 4.5% 
B) 22.14% 
C) 40.4% 
D) 10.85% 
A) 4.5% 
B) 22.14% 
C) 40.4% 
D) 10.85%

Question 2

There is no proven cause and effect link between non-financial performance measures and _________________ success.

Accepted Answer

The answer of There is no proven cause and effect...

Question 3

The ratio that measures the profit relative to sales is:

Accepted Answer

A) residual income. 
B) investment turnover. 
C) return on investment. 
D) return on sales. 
A) residual income. 
B) investment turnover. 
C) return on investment. 
D) return on sales.

Question 4

A responsibility centre which is responsible for both cost inputs and revenue is known as a:

Accepted Answer

A) cost centre. 
B) revenue centre. 
C) profit centre. 
D) investment centre. 
A) cost centre. 
B) revenue centre. 
C) profit centre. 
D) investment centre.

Question 5

Which of these is an investment base that could be used in ROI and RI calculations?

Accepted Answer

A) original cost 
B) written-down value 
C) market value 
D) all the options are possible investment bases for ROI and RI calculations 
A) original cost 
B) written-down value 
C) market value 
D) all the options are possible investment bases for ROI and RI calculations

Question 6

The formula for residual income is:

Accepted Answer

A) profit before tax - (required rate of return x investment). 
B) profit/sales. 
C) sales/investment. 
D) operating profit after tax - (cost of capital x capital). 
A) profit before tax - (required rate of return x investment). 
B) profit/sales. 
C) sales/investment. 
D) operating profit after tax - (cost of capital x capital).

Question 7

The formula for return on investment is ___________ divided by ____________.

Accepted Answer

The answer of The formula for return on investment is...

Question 8

From the list below the best financial performance measure for a cost centre would be:

Accepted Answer

A) return on investment 
B) residual income 
C) budgeted costs less actual costs 
D) economic value added 
A) return on investment 
B) residual income 
C) budgeted costs less actual costs 
D) economic value added

Question 9

At a divisional level,when using cost information for pricing decisions:

Accepted Answer

A) only controllable costs should be included in the decision 
B) common costs must be included as pricing needs to cover the entity's total costs 
C) only common costs should be included in the decision 
D) none of the options is true 
A) only controllable costs should be included in the decision 
B) common costs must be included as pricing needs to cover the entity's total costs 
C) only common costs should be included in the decision 
D) none of the options is true

Question 10

Which of the items below are examples of non-financial performance measures for operating performance?

Accepted Answer

A) customer response time 
B) warranty claims 
C) all of the items are examples of non-financial performance measures for operating performance 
D) percentage of defects per delivery 
A) customer response time 
B) warranty claims 
C) all of the items are examples of non-financial performance measures for operating performance 
D) percentage of defects per delivery

Question 11

The return on assets for a firm with a profit margin of 4.5%,compared to a firm with a profit margin of 3.5%,will:

Accepted Answer

A) always be higher 
B) always be lower 
C) always be the same 
D) could be higher or lower 
A) always be higher 
B) always be lower 
C) always be the same 
D) could be higher or lower

Question 12

The approach where ROI = return on sales × investment turnover is known as the _______ _________ approach.

Accepted Answer

The answer of The approach where ROI = return on...

Question 13

A change in the investment turnover ratio from 2.3 times to 3.7 times will always mean,no matter what other factors change,that:

Accepted Answer

A) more sales are being generated relative to investment. 
B) less sales are being generated relative to investment. 
C) return on investment will be higher. 
D) return on investment will be lower. 
A) more sales are being generated relative to investment. 
B) less sales are being generated relative to investment. 
C) return on investment will be higher. 
D) return on investment will be lower.

Question 14

When reporting on divisional performance,the format generally used is:

Accepted Answer

A) a contribution margin format 
B) a gross profit format 
C) a net profit format 
D) none of the options gives the format generally used when reporting on divisional performance. 
A) a contribution margin format 
B) a gross profit format 
C) a net profit format 
D) none of the options gives the format generally used when reporting on divisional performance.

Question 15

In using the balanced scorecard which of the four perspectives would the measures of contribution margin per product and changes in cash flow be most likely to apply to?

Accepted Answer

A) financial 
B) customer 
C) internal operations 
D) innovation and improvement activities 
A) financial 
B) customer 
C) internal operations 
D) innovation and improvement activities

Question 16

Economic value added is:

Accepted Answer

A) a long-term performance indicator 
B) a short-term performance indicator 
C) a medium-term performance indicator 
D) not a performance indicator 
A) a long-term performance indicator 
B) a short-term performance indicator 
C) a medium-term performance indicator 
D) not a performance indicator

Question 17

Which of the following statements regarding the balanced scorecard approach is true?

Accepted Answer

A) The balanced scorecard uses only long-term performance measures. 
B) The balanced scorecard is designed to encourage the use of a wide range of measures to gauge performance. 
C) The balanced scorecard uses only short-term performance measures. 
D) The balanced scorecard is used because there is a causal relationship between all of the measures and their economic impact. 
A) The balanced scorecard uses only long-term performance measures. 
B) The balanced scorecard is designed to encourage the use of a wide range of measures to gauge performance. 
C) The balanced scorecard uses only short-term performance measures. 
D) The balanced scorecard is used because there is a causal relationship between all of the measures and their economic impact.

Question 18

If return on sales is 16% and investment turnover is 1.5 times,return on investment is ____________.

Accepted Answer

The answer of If return on sales is 16% and...

Question 19

An advantage of using economic value added as a performance indicator is:

Accepted Answer

A) Minimisation of suboptimal decision-making 
B) The charge for capital can be varied to take into account various levels of risk 
C) Adjustments can be made to the components within the equation to suit the specific circumstances of each division 
D) all of the above 
A) Minimisation of suboptimal decision-making 
B) The charge for capital can be varied to take into account various levels of risk 
C) Adjustments can be made to the components within the equation to suit the specific circumstances of each division 
D) all of the above

Question 20

The balanced scorecard framework implies that:

Accepted Answer

A) all of the options are implications of the balanced scorecard framework 
B) traditional performance measures alone are inadequate to capture the entire performance of the entity. 
C) that long-term and short term measures need to be considered 
D) non-financial as well as financial measures need to be considered 
A) all of the options are implications of the balanced scorecard framework 
B) traditional performance measures alone are inadequate to capture the entire performance of the entity. 
C) that long-term and short term measures need to be considered 
D) non-financial as well as financial measures need to be considered

If return on investment is 15.5% and investment turnover is 0.7 times profit margin is:

There is no proven cause and effect link between non-financial performance measures and _________________ success.

The ratio that measures the profit relative to sales is:

A responsibility centre which is responsible for both cost inputs and revenue is known as a:

Which of these is an investment base that could be used in ROI and RI calculations?

The formula for residual income is:

The formula for return on investment is _ divided by __.

From the list below the best financial performance measure for a cost centre would be:

At a divisional level,when using cost information for pricing decisions:

Which of the items below are examples of non-financial performance measures for operating performance?

The return on assets for a firm with a profit margin of 4.5%,compared to a firm with a profit margin of 3.5%,will:

The approach where ROI = return on sales × investment turnover is known as the _ ___ approach.

A change in the investment turnover ratio from 2.3 times to 3.7 times will always mean,no matter what other factors change,that:

When reporting on divisional performance,the format generally used is:

In using the balanced scorecard which of the four perspectives would the measures of contribution margin per product and changes in cash flow be most likely to apply to?

Economic value added is:

Which of the following statements regarding the balanced scorecard approach is true?

If return on sales is 16% and investment turnover is 1.5 times,return on investment is ____________.

An advantage of using economic value added as a performance indicator is:

The balanced scorecard framework implies that:

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Cost-Volume-Profit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Filters

Exam 14: Performance Measurement

If return on investment is 15.5% and investment turnover is 0.7 times profit margin is:

There is no proven cause and effect link between non-financial performance measures and _________________ success.

The ratio that measures the profit relative to sales is:

A responsibility centre which is responsible for both cost inputs and revenue is known as a:

Which of these is an investment base that could be used in ROI and RI calculations?

The formula for residual income is:

The formula for return on investment is ___________ divided by ____________.

From the list below the best financial performance measure for a cost centre would be:

At a divisional level,when using cost information for pricing decisions:

Which of the items below are examples of non-financial performance measures for operating performance?

The return on assets for a firm with a profit margin of 4.5%,compared to a firm with a profit margin of 3.5%,will:

The approach where ROI = return on sales × investment turnover is known as the _______ _________ approach.

A change in the investment turnover ratio from 2.3 times to 3.7 times will always mean,no matter what other factors change,that:

When reporting on divisional performance,the format generally used is:

In using the balanced scorecard which of the four perspectives would the measures of contribution margin per product and changes in cash flow be most likely to apply to?

Economic value added is:

Which of the following statements regarding the balanced scorecard approach is true?

If return on sales is 16% and investment turnover is 1.5 times,return on investment is ____________.

An advantage of using economic value added as a performance indicator is:

The balanced scorecard framework implies that:

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Cost-Volume-Profit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Filters

The formula for return on investment is _ divided by __.

The approach where ROI = return on sales × investment turnover is known as the _ ___ approach.