Chapter 14: Managing Control Systems, Finances, and People
Test Bank
MULTIPLE CHOICE
1. Control describes the process used to________ objectives.
a.
identifying
b.
monitor
c.
vet
d.
define
2. _________ is the process of monitoring progress and taking corrective action when needed to
ensure that objectives are achieved.
a.
Strategic planning
b.
Progress management
c.
Controlling
d.
Alignment
3. Preliminary control focuses on the __________ stage of the systems process.
a.
inputs
b.
outputs
c.
transformation process
d.
customer/stakeholder satisfaction
4. __________ is designed to anticipate and prevent possible problems.
a.
Concurrent control
b.
Preliminary control
c.
Rework control
d.
Damage control
5. Concurrent control focuses on the __________ stage of the systems process.
a.
inputs
b.
outputs
c.
transformation process
d.
customer/stakeholder satisfaction
6. ______________ is action taken to fix an output.
a.
Rework control
b.
Damage control
c.
Concurrent control
d.
Preliminary control
7. Planning and organizing are the keys to ____________.
a.
rework control
b.
damage control
c.
concurrent control
d.
preliminary control
8. Preventative maintenance is an example of __________.
a.
damage control
b.
preliminary control
c.
concurrent control
d.
rework control
9. Warranties are an example of __________.
a.
concurrent control
b.
rework control
c.
damage control
d.
preliminary control
10. Rework control focuses on the __________ stage of the systems process.
a.
inputs
b.
outputs
c.
transformation process
d.
customer/stakeholder satisfaction
11. Which of the following is not a functional area/department?
a.
Operations
b.
Human resources
c.
Funding
d.
Marketing
12. ______________ is necessary when preliminary and concurrent controls have failed.
a.
Salvage control
b.
Feedforward control
c.
Damage control
d.
Rework control
13. Preliminary control is used to _____________.
a.
anticipate and prevent problems
b.
ensure that standards are met
c.
fix an output
d.
minimize negative impacts on customers/stakeholders
14. An action taken to fix an output is _________.
a.
damage control
b.
rework control
c.
warrantied control
d.
feedback
15. XYZ Corp’s customer satisfaction is slowly declining. What part of the organizational system
are they most likely lacking in?
a.
Feedback
b.
Inputs
c.
Concurrent control
d.
Damage control
16. The products made by XYZ Corp during the last shift are all missing the bag of screws that
should be in each box. What system control needs to be used at this point?
a.
Concurrent control
b.
Preliminary control
c.
Rework control
d.
Damage control
17. Feedforward control is also known as _________.
a.
preliminary control
b.
rework control
c.
damage control
d.
concurrent control
18. Service industries should focus primarily on preliminary and ______________ control.
a.
damage
b.
concurrent
c.
feedforward
d.
rework
19. Although in most organizations, the __________ department is the only functional area that
actually transforms the inputs into the outputs of goods and services that are sold to customers,
all functional departments use the systems process.
a.
operations
b.
marketing
c.
human resources
d.
finance
20. Which of the following is not a step in the control systems process?
a.
Correct or reinforce
b.
Feedback
c.
Measure performance
d.
Set objectives and standards
21. __________ measure performance levels in the areas of quantity, quality, time, cost, and
behavior.
a.
Objectives
b.
Metrics
c.
Guidelines
d.
Standards
22. Sally, the manager at a large restaurant chain, was just given information from the corporate
office on how to increase sales in their region. She was given a list of goals for the next quarter.
She was the recipient of what step in the control systems process?
a.
Measure performance.
b.
Correct or reinforce.
c.
Set objectives and standards.
d.
Compare performance to standards.
23. Professor Lockhart signed a contract at the State University, where he has to teach at least eight
classes per year, for which he will be paid an annual salary. He now has to follow which two
standards?
a.
Quantity and time
b.
Behavior and time
c.
Quality and cost
d.
Behavior and cost
24. Critical success factors are used during what step of the control systems process?
a.
Set objectives and standards.
b.
Correct or reinforce.
c.
Measure performance.
d.
Compare performance to standards.
25. Critical success factors in a retail store would include all of the following, except __________.
a.
maintaining the right product mix in each location
b.
analyzing profit margins in that industry and setting correct prices
c.
advertising the products in order to pull customers in
d.
upgrading the point-of-sale system to PC-based registers
26. Comparing performance to standards is what step in the control systems process?
a.
Step 1
b.
Step 2
c.
Step 3
d.
Step 4
27. Which of the following is a constant control method?
a.
Budgeting
b.
Audits
c.
Reports
d.
Standing plans
28. A performance or variant report is a useful tool in what step of the control systems process?
a.
Comparing performance to standards.
b.
Setting objectives and standards.
c.
Measure performance.
d.
Correct or reinforce.
29. _________ standards dictate what an employee should do and should not do.
a.
Behavior
b.
Personality
c.
Procedures
d.
Culture
30. During the correct or reinforce step of the control systems process, after performance is
complete and it is too late to take corrective action to meet the standard, the appropriate
corrective actions are to do all of the following, except _________.
a.
analyze why the standards were not met
b.
use the information to develop preliminary control
c.
develop sophisticated rework controls and oversee their immediate implementation
d.
collect feedback so as to take corrective action necessary to meet the
objective/standard next time
31. ___________ is the rate of repetition of measures taken to control performance.
a.
Operations performance rate
b.
Inquiry measurement period
c.
Rework analysis cycle
d.
Control frequency
32. All of the following are examples of standing plans, except __________.
a.
procedures
b.
budgets
c.
rules
d.
policies
33. Clan or group control relies on which of the following?
a.
Culture and norms
b.
Standing plans
c.
Symbolic leadership
d.
Group cohesion
34. An example of an occasional control is which of the following?
a.
Budgeting
b.
Monthly meetings
c.
Self-control
d.
Observation
35. _____________ analyzes the organization’s planning, organizing, leading, and controlling
functions to look for improvements.
a.
Management audit
b.
Strategic audit
c.
Accounting audit
d.
Functional audit
36. Self-control, clan control, and standing plans are measured in what control frequency?
a.
Periodic
b.
Occasional
c.
Constant
d.
Each is a different control frequency.
37. The preparation of a budget is what kind of control?
a.
Concurrent
b.
Damage
c.
Rework
d.
Preliminary
38. Dianne, an employee at the local hospital, notices a “No Smoking” sign outside the building and
around the exits. What primary level of control is being used?
a.
Standing plans
b.
Self-control
c.
Observation
d.
Clan control
39. A team working on a project has noticed that one of their members has been working at too slow
a pace, so other team members ask what the holdup is. What primary level of control is used in
this situation as they ask that question?
a.
Regular meetings
b.
The exception rule
c.
Clan control
d.
Observation
40. Grant is running his usual weekly report in connection with this current project. Today, he
notices that the numbers are very different from their normal range. Because variance in the
numbers usually means there is some issue with cash flow, Grant takes the report to his
supervisor for assistance. Grant’s decision to involve his supervisor is an example of
______________.
a.
observation
b.
the exception principle
c.
special reports
d.
audits
41. You are working at a tax office that completes personal tax returns for a fee. Your boss asks you
to estimate how much your entire office will collect in fees for the coming year. What will you
create for your boss?
a.
Fee budget
b.
Revenue budget
c.
Expense budget
d.
Capital expenditures budget
42. You are working at a tax office that completes personal tax returns for a fee. Your boss asks you
to estimate how much it will cost your company to conduct tax returns in the coming year. What
will you create for your boss?
a.
Expense budget
b.
Revenue budget
c.
Fee budget
d.
Capital expenditures budget
43. You are working at a tax office that completes personal tax returns for a fee. Your boss asks you
to estimate how much it would cost to open a second office in response to increased demand.
What will you create for your boss?
a.
Fee budget
b.
Revenue budget
c.
Expense budget
d.
Capital expenditures budget
44. A(n) __________ is a planned quantitative allocation of resources for specific activities.
a.
expense report
b.
capital plan
c.
budget
d.
resource structure
45. Which of the following is not developed during the master budgeting process?
a.
Human resource spending plan
b.
Revenue and expenditure operating budgets
c.
Capital expenditures budget
d.
Financial budgeted cash flow, income statement, and balance sheet
46. The finance __________ is responsible for the budgeting process that results in a master budget
for the entire organization.
a.
manager
b.
controller
c.
executive officer
d.
coordinator
47. The revenue and expense budgets are often referred to as the __________.
a.
financial statements
b.
financial controls
c.
operating budgets
d.
operations directives
48. Venture capital is the term for what businesses use to do which of the following activities?
a.
Acquire a business
b.
Expand a business
c.
Spin off a business
d.
Start a new business
49. Because it is focused on continually developing new ways to bring in revenues, the __________
is usually considered the most important budget.
a.
revenue budget
b.
expense budget
c.
capital expenditures budget
d.
operating budget
50. The main difference between pro forma statements and actual statements is that pro forma
statements__________.
a.
report past results
b.
project future results
c.
formalize financial data for easy comparison
d.
combine past and future results
51. Who of the following is not a regular user of the financial statements in the vast majority of
privately owned companies?
a.
All employees
b.
External suppliers
c.
Creditors
d.
Investors
52. An investment banker would look at the __________ to determine how much revenue and
profit a prospective company had for any given time period.
a.
cash flow statement
b.
balance sheet
c.
manager’s prospectus
d.
income statement
53. The Sign Garden purchased a large amount of photo paper on credit. The amount of the loan
that remains to be paid (the liability) could be found on which financial statement?
a.
Income statement
b.
Balance sheet
c.
Cash flow statement
d.
Debt ledger
54. Samantha would like to know how much cash was received from operating activities last year.
She could easily find this information in the __________.
a.
income statement
b.
revenue budget
c.
balance sheet
d.
cash flow statement