Which of the following statements are TRUE? 1. Responsibility accounting attempts to assign blame for problems to a specific manager. 11. One benefit of a budget is that it helps managers gather relevant information for improving future performance. III. Challenging budgets tend to motivate improved performance. IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.

Which of the following statements are TRUE? 1. Responsibility accounting attempts to assign blame for problems to a specific manager. 11. One benefit of a budget is that it helps managers gather relevant information for improving future performance. III. Challenging budgets tend to motivate improved performance. IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the following situations will likely lead to human behavior problems? a. allowing employees the opportunity to be a part of the budget process b. setting goals too loosely, creating a budgetary slack c. setting goals that are consistent across the firm d. setting goals that are reasonable and attainable
Budgeting is essential to businesses, but it is not that simple to implement. What are some challenges and weaknesses that a firm may find in the budgeting process?
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Which of the following statements regarding responsibility accounting systems is true? O Residual income is best used when evaluating the performance of profit centers rather than investment centers. An advantage of using return on investment to evaluate performance is that it encourages managers to increase both operating assets and operating income. O The use of residual income as a performance measure may lead segment managers to reject investments in projects that would be favorable for the company as a whole. O Residual income is a less effective metric for evaluating performance if there are significant differences in the size of the operating segments. O None of the above statements is true.
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A good performance measurement system should have the following characteristics: It should be based on activities over which managers have control or influence. It should be measurable. It should be timely. It should be consistent in its application. When appropriate, the actual results should be compared with the budgeted results, standards, or past performance. The measurements must not favor the manager over the goals of the entire organization. Often, managers have the ability to make decisions that favor their individual units but that may be detrimental to the overall performance of the organization. True / False
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Criticisms of return on investment as the only performancemeasure include:a. ROI focuses on short-term decisions.b. ROI is focused on only one component of the value chain.c. Managers evaluated based only on ROI are sometimesmotivated not to make an investment that is in the bestinterest of the organization as a whole.d. All of the above.
Which of the following is not a benefit of participative budgeting? Multiple Choice It serves as training or development for managers. It provides information that employees know but managers do not. It reduces or eliminates the need for tracking actual cost activity. It enhances employee motivation and acceptance of goals.
All of the following is related to the controlling function of management except: a. Performance reports b. Gathering feedback c. None of the given answers d. Establishing goals e. Comparison between actual and budgeted results
Which of the following is not a benefit of budgeting? It allows for coordination between different departments within a firm. It compels managers to develop objectives and to plan allocating resources to achieve the objective. It provides performance evaluation and feedback. It reduces the need for analysis with regard to company expenses.