Deck 15: Managing for Results

Question 1

Which of the following is NOT the role of policy makers in solving social problems?

A)Selecting among options
B)Developing alternatives.
C)Appropriating resources required to implement programs
D)Establishing expected goals.

Answer 1

C

Question 2

Use the following information to answer Questions
A piece of federal legislation has as one of its objectives "improving the health of older Americans." Title 20 of that legislation provides for granting federal funds to governmental or not-for-profit entities to provide nutritious hot meals to older Americans in congregate settings.Senior Citizens Center, a not-for-profit entity, receives funding under this legislation.The Center determines for one-month period, the following: $$\begin{array} { l l } \text { Number of meals served}&500\\\text { Total number of individuals participating in the program}& 25\\\text { Total meals costs incurred }& \$ 860\\\text { Average cost per meal }& \$ 1.72\\\end{array}$$

-The numerical value that best represents outcomes is

A)500
B)$1.72
C)$860
D)None of the above.

Answer 2

None of the above.

Question 3

It is difficult for accountants to have a role beyond auditing the financial statements of governments and not-for-profits.

Answer 3

False

Question 4

One of the principal disadvantages of zero-based budgeting is that it requires budgetary units to provide information that may never be used in the decision process.

Question 5

Which of the following groups are involved in auditing a program?

A)Accountants.
B)Statisticians.
C)Economists.
D)All of the above.

Question 6

Most accounting organizations support the notion that performance measures should be included in general-purpose annual financial reports.

Question 7

Which of the following groups is least likely to be involved in evaluating the efficiency and effectiveness of government programs?

A)Accountants.
B)Legislators.
C)Economists.
D)Statisticians.

Question 8

It is widely accepted that capital assets should be financed with resources on hand to achieve interperiod equity.

Question 9

In which of the following steps of the management cycle of governmental and not-for-profit entities are accountants least involved?

A)Performing cost benefit analysis on proposed programs.
B)Selecting among alternative programs.
C)Preparing financial reports.
D)Evaluating efficiency and effectiveness of programs.

Question 10

Use the following information to answer Questions
A piece of federal legislation has as one of its objectives "improving the health of older Americans." Title 20 of that legislation provides for granting federal funds to governmental or not-for-profit entities to provide nutritious hot meals to older Americans in congregate settings.Senior Citizens Center, a not-for-profit entity, receives funding under this legislation.The Center determines for one-month period, the following: $$\begin{array} { l l } \text { Number of meals served}&500\\\text { Total number of individuals participating in the program}& 25\\\text { Total meals costs incurred }& \$ 860\\\text { Average cost per meal }& \$ 1.72\\\end{array}$$

-The numerical value that best represents outputs of this program is

A)500
B)$1.72
C)$860
D)None of the above.

Question 11

"Outputs" is a term used to indicate the quantity or units of service provided by an activity.

Question 12

Accountants are actively involved in collecting and analyzing data to be used by public policy makers.Which of the following other groups might also be involved in the data collection and analysis process?

A)Statisticians.
B)Economists.
C)Program managers.
D)All of the above.

Question 13

The stated objective of the National Partnership for Reinventing Government is to "reinvent government to work better, cost less, and to get Americans to care about it."

Question 14

Zero-based budgeting requires the periodic review of all programs, not just new ones.

Question 15

Rather than cash inflows, the potential benefits of many capital assets can be expressed as cash savings to governments and not-for-profits.

Question 16

An accounting program has determined that preparing students for careers in public accounting is the program's goal.Which of the following measurements is the best outcomes measurement for this accounting program?

A)Number of accounting majors that graduate.
B)Number of students that pass the CPA examination.
C)Number of students in management positions in public accounting firms ten years after graduation.
D)Number of students employed in public accounting within one year of graduation.

Question 17

All governments and not-for-profit entities should establish goals and objectives.Which of the following is a desirable characteristic of an operational objective?

A)An operational objective should be open to interpretation.
B)An operational objective should be measurable.
C)An operational objective should be a statement of aspirations.
D)An operational objective should be accomplishable by an unspecified future date.

Question 18

Many of the benefits of program budgeting may be ascribed to the organizational self-examination that it requires at the outset.

Question 19

GASB SEA reporting proposals focus on measures of efforts, measures of accomplishments, and measures that relate efforts to accomplishments.

Question 20

Which of the following is a true statement regarding the implementation phase of a government program?

A)Internal accountants are not involved; only program managers are involved.
B)Internal accountants are actively involved, preparing budgets, controlling costs, and preparing operating reports.
C)Internal accountants have only a minor role, preparing reports for external parties.
D)Internal accountants have final say in program choices.

Question 21

Which of the following is an advantage of program budgeting over traditional budgeting techniques?

A)It promotes continuation of existing programs.
B)It relates expenditures to objectives.
C)It encourages consideration of alternative means of accomplishing the objective.
D)Both b and c.

Question 22

Which of the following is true about zero-based budgeting?

A)It is a variant of program budgeting.
B)It requires activities of the entity to be evaluated over a five-year period.
C)It currently is used by most state and local governments.
D)It is incremental in approach.

Question 23

Which of the following is an example of an efficiency measure?

A)Cost per client placed in an appropriate job.
B)Cost per ton of garbage collected.
C)Cost per gallon of water suitable for drinking.
D)Cost per child reading at grade level.

Question 24

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-Which option should the City select based solely on cost?

A)Option #1
B)Option #2
C)Option #3
D)Unable to determine.

Question 25

Because of the difficulty of measuring quality teaching, many colleges and universities rely heavily on student evaluations of the quality of instruction and accomplishment of course objectives.Which of the following is are a true statements?

A)This is a good practice, which may improve the quality of instruction.
B)This is a good idea but may have unintended negative consequences by causing faculty to decrease the rigor of a course.
C)Both are true.
D)Neither is true.

Question 26

At many colleges and universities, students are asked to evaluate the quality of instruction received and course content for all undergraduate courses.The evaluations are used for which of the following?

A)As an outcome measure.
B)As an output measure.
C)As a surrogate for an outcome measure.
D)As a surrogate for an output measure.

Question 27

Help, Inc., a not-for-profit entity dedicated to providing assistance to the needy, has submitted to its governing body a budget that includes the following budgeted expenditures. $$\begin{array} { l l } \text { Nutrition } & \$ 250,000 \\\text { Family housing assistance } & \$ 300,000 \\\text { Shelter House } & \$ 200,000 \\\text { Legal aid } & \$ 100,000 \\\text { Medical assistance } & \$ 150,000\end{array}$$ Which of the following best describes the budgeting practices of this entity?

A)The entity uses program budgeting techniques.
B)The entity uses object classification budgeting techniques.
C)The entity uses zero-based budgeting techniques.
D)The entity uses priority-based budgeting techniques.

Question 28

With regard to audits of SEA, which of the following might be appropriate for an auditor to do?

A)Assess the appropriateness of the organizations basic objectives.
B)Verify that the government selected the correct indicators to gauge whether its objectives were achieved.
C)Evaluate whether SEA data is fairly presented.
D)Evaluate the usefulness of SEA data.

Question 29

Program budgeting, although highly popular and successful, has many disadvantages or drawbacks.Which of the following is an advantage or benefit of program budgeting?

A)It may provide too much information.
B)It may be applied perfunctorily after its initial implementation.
C)It may not live up to its expectations.
D)It may discourage funding at levels other than those that will result in actual increases in results.

Question 30

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-What is the present value of Option #1?

A)$220,000.
B)$275,072.
C)$297,408.
D)$433,442.

Question 31

College professors are evaluated on teaching, research, and service.Which of the following would be a surrogate for the desired operational objective of "engaged in research that expands the horizons of knowledge."

A)Value of research grants received.
B)Number of publications in peer-reviewed journals.
C)Both of the above.
D)Neither of the above.

Question 32

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-What is the present value of Option #3?

A)$ 18,426.
B)$235,522.
C)$236,080.
D)$242,882.

Question 33

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-Due to limited resources, Johnson City must select from among the following capital projects.Which project should the City select?

A)Court-ordered improvements to the City Jail.
B)Repairing the roof on City Hall.
C)Replacing an inefficient data processing system with a more efficient system.
D)Adding two new police cars to the fleet.

Question 34

Which of the following is NOT an example of a performance budget?

A)Program budget.
B)Object classification budget.
C)Zero-based budget.
D)Priority-based budget.

Question 35

Which of the following is an example of a cost-outcome measure?

A)Cost per passenger-mile on public transit.
B)Cost per hot meal served.
C)Cost per legal case handled.
D)Cost per client placed in gainful employment.

Question 36

Aid for Friends, a not-for-profit entity, provides temporary shelter for the homeless, provides temporary housing and other assistance for victims of spousal abuse, serves meals to the needy in a congregate setting, operates a second-hand clothing store, and operates a food bank to provide food for those temporarily in need.Which of the following is the best statement of operating objectives for Aid for Friends?

A)Our objective is to provide food and shelter for the needy.
B)Our objective is to provide assistance to those in need.
C)Our objective is to provide temporary assistance to those in need.
D)Our objective is to help the needy achieve financial independence.

Question 37

Which of the following is true about budgets prepared by entities that use program budgeting techniques?

A)The budget package will include information about the object classification expenditures necessary to accomplish a specific goal or objective.
B)The budget package will generally include information about the costs of providing a variety of levels of service of the same program.
C)The budget package will generally include information about the importance of the activity in accomplishing the entity's objectives, alternatives methods of accomplishing the objective, and the consequences of not performing the activity.
D)All of the above can be true.

Question 38

Which of the following is a reason for governmental and not-for-profit entities to incorporate service efforts and accomplishments SEA measures into their management process?

A)Measuring and reporting upon helps management determine short-term cash flow requirements.
B)SEA measures allow management to make objective assessments about whether the goals of the government are worth achieving.
C)SEA reporting fosters sound budgeting and administration.
D)SEA fosters budgetary compliance and custodianship of resources.

Question 39

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-What is the present value of Option #2?

A)$ 20,102.
B)$ 36,000.
C)$264,964.
D)$285,066.

Question 40

Which of the following is not one of the three categories of SEA measures identified by GASB?

A)Measures of efforts.
B)Measures of financial stewardship.
C)Measures of accomplishment.
D)Measures that relate efforts to accomplishments.

Question 41

Use the following information to answer Questions
The City Swimming Pool is considering several options for maintaining the grounds around the pool area over the next ten years.One option is to buy a tractor with equipment for cleaning the underbrush and cutting the grass.A second option is to contract out with a local Garden and Nursery Center that provides this kind of service.A third option is to hire many local youths to do most of the work by hand.The City already has several small lawnmowers and grass-cutting equipment. $$\begin{array}{l}\begin{array} {lll } \text {Cost of tractor and equipment useful life 10 years }&\$220,000\\\text {Salvage value of tractor in 10 years }&20,000\\\text {Yearly cost of operator }&6,000\\\text {Yearly maintenance and upkeep, supplies, etc. }&3,000\\\text {Option \#2 }&\\\text {Yearly fees }&\$36,000\\\text {Option \#3 }&\\\text {Yearly cost of part-time labor }&\$32,000\\\text {Yearly cost of supplies, equipment repair, etc. }&1,000\\\text {Present value factors \( @ 6 \% \) }&\\\text {\( \$ 1 \) due in ten years }&.55839\\\text {Annuity of \( \$ 1 \) for 10 years }&7.36009\\\end{array}\end{array}$$

-Which of the following best describes the role of benefit-cost analysis in the capital budgeting process by governmental and not-for-profit entities?

A)It may be used to enhance the objectivity of decision-making.
B)Because all costs and all benefits can be quantified, it removes subjectivity from the decision process.
C)It eliminates the role of value judgments in the decision-making process.
D)It ensures that decisions about capital asset acquisition will be consistent with organizational goals and objectives.