Question 1

Which of these is regarded as a disadvantage of return on investment as a performance measure?

Accepted Answer

A)  It links profit with the investment base. 
B)  It does not take into consideration the different size and type of divisions. 
C)  It is difficult to calculate. 
D)  All of the options are disadvantages of return on investment as a performance measure. 
A)  It links profit with the investment base. 
B)  It does not take into consideration the different size and type of divisions. 
C)  It is difficult to calculate. 
D)  All of the options are disadvantages of return on investment as a performance measure.

Question 2

Which of the following is an advantage of the residual income performance measure?

Accepted Answer

A)  It minimises the suboptimal decision making that can stem from the use of ROI. 
B)  The cost of capital is easy to determine. 
C)  The required rate of return is easy to determine. 
D)  It encourages short-term decision making. 
A)  It minimises the suboptimal decision making that can stem from the use of ROI. 
B)  The cost of capital is easy to determine. 
C)  The required rate of return is easy to determine. 
D)  It encourages short-term decision making.

Question 3

Using Residual Income (RI)as a performance indicator can encourage (short-term/long-term)____________ decision making.

Accepted Answer

The answer of Using Residual Income (RI)as a performance indicator...

Question 4

Which of the following statements is not true in relation to measuring individual performance?

Accepted Answer

A)  The individual performance measures should highlight the most important aspect of an employee's job. 
B)  An example of a short-term incentive for individual employees is the payment of a bonus for meeting targets. 
C)  Executives' incentive packages should only include financial performance measures. 
D)  Share options schemes are designed to reward executives for long-term performance. 
A)  The individual performance measures should highlight the most important aspect of an employee's job. 
B)  An example of a short-term incentive for individual employees is the payment of a bonus for meeting targets. 
C)  Executives' incentive packages should only include financial performance measures. 
D)  Share options schemes are designed to reward executives for long-term performance.

Question 5

With executive remuneration packages,long-term performance is rewarded by:

Accepted Answer

A)  an annual bonus based on achievement of profit targets. 
B)  fixed salary and superannuation. 
C)  incentives such as share option plans. 
D)  a company car. 
A)  an annual bonus based on achievement of profit targets. 
B)  fixed salary and superannuation. 
C)  incentives such as share option plans. 
D)  a company car.

Question 6

The balanced scorecard framework implies that:

Accepted Answer

A)  traditional performance measures alone are inadequate to capture the entire performance of the entity. 
B)  only long-term measures need to be considered. 
C)  only short-term measures need to be considered. 
D)  non-financial as well as financial measures need to be considered. 
A)  traditional performance measures alone are inadequate to capture the entire performance of the entity. 
B)  only long-term measures need to be considered. 
C)  only short-term measures need to be considered. 
D)  non-financial as well as financial measures need to be considered.

Question 7

There is a need to combine return on investment (ROI)with long-term performance measures because:

Accepted Answer

A)  ROI is a short-term performance measure. 
B)  managers can manipulate the ROI for their own benefit. 
C)  managers may reject an investment because it could decrease the overall ROI. 
D)  all of the options are true. 
A)  ROI is a short-term performance measure. 
B)  managers can manipulate the ROI for their own benefit. 
C)  managers may reject an investment because it could decrease the overall ROI. 
D)  all of the options are true.

Question 8

Which of the following is an example of a financial performance measure?

Accepted Answer

A)  Production and delivery lead times. 
B)  Employee productivity. 
C)  Process downtime. 
D)  Return on investment. 
A)  Production and delivery lead times. 
B)  Employee productivity. 
C)  Process downtime. 
D)  Return on investment.

Question 9

In using the balanced scorecard,which of the four perspectives would most likely apply to the measures of 'customer response time' and 'quality training and documentation'?

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 10

If the purpose of an entity is to maximise the wealth of its owners,then the performance measure that will ensure managers make decisions in the best interest of the owners is:

Accepted Answer

A)  profit margin. 
B)  return on investment. 
C)  residual income. 
D)  economic value added. 
A)  profit margin. 
B)  return on investment. 
C)  residual income. 
D)  economic value added.

Question 11

A statement setting out the entity's overall philosophy and objectives is a/an:

Accepted Answer

A)  financial statement. 
B)  integrated statement. 
C)  mission statement. 
D)  income statement. 
A)  financial statement. 
B)  integrated statement. 
C)  mission statement. 
D)  income statement.

Question 12

The format generally used when reporting on divisional performance is a:

Accepted Answer

A)  gross profit format. 
B)  net profit format. 
C)  contribution margin format. 
D)  a balance sheet format. 
A)  gross profit format. 
B)  net profit format. 
C)  contribution margin format. 
D)  a balance sheet format.

Question 13

Changes to company __________________ and accounting standards now require large companies to report on director and executive remunerations in their external reports.

Accepted Answer

The answer of Changes to company __________________ and accounting standards...

Question 14

A disadvantage of using economic value added as a performance indicator is:

Accepted Answer

A)  complex modifications to the formula. 
B)  modifications can be manipulated. 
C)  it is a short-term performance indicator. 
D)  all of the above. 
A)  complex modifications to the formula. 
B)  modifications can be manipulated. 
C)  it is a short-term performance indicator. 
D)  all of the above.

Question 15

If an investment is $400 000,credit sales are $350 000 and cash sales are $200 000,the investment turnover ratio is:

Accepted Answer

A)  0.73 times. 
B)  0.88 times. 
C)  1.38 times. 
D)  2 times. 
A)  0.73 times. 
B)  0.88 times. 
C)  1.38 times. 
D)  2 times.

Question 16

The first reporting period for entities whose characteristics are covered under the National Greenhouse and Energy Reporting Act commenced on:

Accepted Answer

A)  1 July 2006 
B)  1 July 2008 
C)  1 July 2010 
D)  1 July 2012 
A)  1 July 2006 
B)  1 July 2008 
C)  1 July 2010 
D)  1 July 2012

Question 17

The ___________ value added performance measure is based on the economic increase in an organisation's value after a suitable charge for capital is deducted.

Accepted Answer

The answer of The ___________ value added performance measure is...

Question 18

Which of the following is a disadvantage of non-financial performance measures?

Accepted Answer

A)  They are not likely to be linked to the goals of the organisation. 
B)  Various non-financial performance measures can give conflicting results. 
C)  They usually promote long-term thinking. 
D)  They can take longer to identify an entity's problems. 
A)  They are not likely to be linked to the goals of the organisation. 
B)  Various non-financial performance measures can give conflicting results. 
C)  They usually promote long-term thinking. 
D)  They can take longer to identify an entity's problems.

Question 19

Economic value added is:

Accepted Answer

A)  a long-term performance measure of economic value created over a long period of time. 
B)  a calculation that does not take into account how the investment is financed. 
C)  is a measure of the economic increase in an entity's value after an appropriate charge for capital has been deducted. 
D)  all of the options are true. 
A)  a long-term performance measure of economic value created over a long period of time. 
B)  a calculation that does not take into account how the investment is financed. 
C)  is a measure of the economic increase in an entity's value after an appropriate charge for capital has been deducted. 
D)  all of the options are true.

Question 20

Which of the following categories is not used in the Environmental management - Environmental performance evaluation - Guidelines relied upon by the United Nations Division for Sustainable Development (UNDSD)?

Accepted Answer

A)  Social performance indicators. 
B)  Environmental condition indicators. 
C)  Operational performance indicators. 
D)  Management performance indicators. 
A)  Social performance indicators. 
B)  Environmental condition indicators. 
C)  Operational performance indicators. 
D)  Management performance indicators.

Which of these is regarded as a disadvantage of return on investment as a performance measure?

Which of the following is an advantage of the residual income performance measure?

Using Residual Income (RI)as a performance indicator can encourage (short-term/long-term)____________ decision making.

Which of the following statements is not true in relation to measuring individual performance?

With executive remuneration packages,long-term performance is rewarded by:

The balanced scorecard framework implies that:

There is a need to combine return on investment (ROI)with long-term performance measures because:

Which of the following is an example of a financial performance measure?

In using the balanced scorecard,which of the four perspectives would most likely apply to the measures of 'customer response time' and 'quality training and documentation'?

If the purpose of an entity is to maximise the wealth of its owners,then the performance measure that will ensure managers make decisions in the best interest of the owners is:

A statement setting out the entity's overall philosophy and objectives is a/an:

The format generally used when reporting on divisional performance is a:

Changes to company __________________ and accounting standards now require large companies to report on director and executive remunerations in their external reports.

A disadvantage of using economic value added as a performance indicator is:

If an investment is $400 000,credit sales are $350 000 and cash sales are $200 000,the investment turnover ratio is:

The first reporting period for entities whose characteristics are covered under the National Greenhouse and Energy Reporting Act commenced on:

The ___________ value added performance measure is based on the economic increase in an organisation's value after a suitable charge for capital is deducted.

Which of the following is a disadvantage of non-financial performance measures?

Economic value added is:

Which of the following categories is not used in the Environmental management - Environmental performance evaluation - Guidelines relied upon by the United Nations Division for Sustainable Development (UNDSD)?

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Balance Sheet

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

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Exam 14: Performance Measurement

Which of these is regarded as a disadvantage of return on investment as a performance measure?

Which of the following is an advantage of the residual income performance measure?

Using Residual Income (RI)as a performance indicator can encourage (short-term/long-term)____________ decision making.

Which of the following statements is not true in relation to measuring individual performance?

With executive remuneration packages,long-term performance is rewarded by:

The balanced scorecard framework implies that:

There is a need to combine return on investment (ROI)with long-term performance measures because:

Which of the following is an example of a financial performance measure?

In using the balanced scorecard,which of the four perspectives would most likely apply to the measures of 'customer response time' and 'quality training and documentation'?

If the purpose of an entity is to maximise the wealth of its owners,then the performance measure that will ensure managers make decisions in the best interest of the owners is:

A statement setting out the entity's overall philosophy and objectives is a/an:

The format generally used when reporting on divisional performance is a:

Changes to company __________________ and accounting standards now require large companies to report on director and executive remunerations in their external reports.

A disadvantage of using economic value added as a performance indicator is:

If an investment is $400 000,credit sales are $350 000 and cash sales are $200 000,the investment turnover ratio is:

The first reporting period for entities whose characteristics are covered under the National Greenhouse and Energy Reporting Act commenced on:

The ___________ value added performance measure is based on the economic increase in an organisation's value after a suitable charge for capital is deducted.

Which of the following is a disadvantage of non-financial performance measures?

Economic value added is:

Which of the following categories is not used in the Environmental management - Environmental performance evaluation - Guidelines relied upon by the United Nations Division for Sustainable Development (UNDSD)?

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Balance Sheet

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Filters