Deck 11: Responsibility Accounting

Question 1

Decentralization is:

A) A major type of responsibility centered within an organization
B) The degree of dispersion of responsibilities
C) The compounding for any given interest
D) Proceeds lost by forgoing other opportunities

Answer 1

The degree of dispersion of responsibilities

Question 2

Advantages of decentralization include:

A) Loss of control
B) Decreased goal congruence
C) Greater speed
D) Lack of managerial talent

Answer 2

Greater speed

Question 3

Disadvantages of decentralization include:

A) Increased need for condition and formal communication
B) More efficient use of time
C) More relevant information
D) Higher quality decisions

Answer 3

Increased need for condition and formal communication

Question 4

Types of responsibility centers include all but one of the following:

A) Service centers
B) Profit centers
C) Cost centers
D) Managerial talent centers

Question 5

Measures of performance responsibility centers include:

A) Responsibility
B) Authority
C) Accountability
D) All of the above

Question 6

Budget variances are:

A) A result of positive revenues
B) The difference between what was budgeted and what actually occurred
C) A budget that accommodates a range of activities
D) A tangible asset pledged to repay a loan

Question 7

Common variances used by health care organizations include

A) Revenue variance
B) Traditional profit center
C) Expense variance
D) a & c

Question 8

Budget variances associated with short term strategies include

A) Revenue enhancement
B) Cost containment
C) Revenue attainment
D) b & c

Question 9

Common complications when using measures to judge financial performance include:

A) Loss of control
B) Greater speed
C) Promotion of short term thinking
D) Efficient use of time

Question 10

Major employee compensation model which of the following advantages:

A) Income predictability
B) At risk distribution
C) Income contingent on uncontrollable forces
D) No financial incentives

Question 11

The degree of decentralization has to balance the advantages and disadvantages within a healthcare organization.

Question 12

Loss of control is a disadvantage of decentralization.

Question 13

Transfer center is a type of responsibility center.

Question 14

A basic attribute of a responsibility center is authority.

Question 15

The result of a favorable variance is less income received than budgeted.

Question 16

Budget variance measures that are long term promote revenue enhancement.

Question 17

Cost centers are responsible for providing services and controlling their costs.

Question 18

Budget variances should not occur with approved budgets.

Question 19

Cost containment means eliminating certain classes of cost.

Question 20

At risk compensation system is based totally on achieving performance goals.