[Chapter 9] Flashcards
Activity-based responsibility accounting focuses on processes and uses both operational and financial measures.
TRUE
Activity-based responsibility accounting employs dynamic standards and emphasizes and supports continuous improvement.
TRUE
A strategic-based responsibility accounting system transforms the strategy of a company into operational objectives and measures.
TRUE.
On the other hand, activity-based responsibility accounting focuses on processes and uses both operational and financial measures.
The most common form of strategic-based responsibility accounting system is the worksheet.
FALSE.
One of the most common form of a strategic based control system (SBCS) is the BALANCED SCORECARD.
In a strategic-based responsibility accounting system, stretch targets are established for individual performance measures.
TRUE
The balanced scorecard is a strategic-based performance management system that identifies four perspectives.
TRUE
Strategy translation means specifying objectives and percentage of revenues from sale of products.
FALSE
Strategy translation means specifying objectives, measures, targets, and initiatives for each perspective.
The customer perspective defines the customer and market segments in which the business unit will compete.
TRUE
Customer value is the sum of realization and sacrifice what the customer gives up and receives.
FALSE.
Customer value is the DIFFERENCE between realization and sacrifice.
Strategic information availability include processes with real-time feedback.
TRUE
Performance measures are derived from a company’s vision, strategy, and objectives.
TRUE
To link measures to a strategy, they must be derived from management and be balanced.
FALSE
To link measures to a strategy, they must be derived from STRATEGY.
Double-loop feedback occurs when managers get information about the effectiveness and the validity of the strategy.
TRUE
Single-loop feedback emphasizes only the effectiveness of implementation, not the validity of the assumptions.
The strategy map connects the balanced scorecard strategy with an organization’s administration.
FALSE
A strategy map is a useful tool that graphically illustrates the cause-and-effect relationships and connects the Balanced Scorecard strategy with an organization’s OPERATING ACTIVITIES.
A testable strategy is a set of linked objectives aimed at an overall goal.
TRUE
In order for the balanced scorecard to succeed, the entire organization must be behind it.
TRUE
Articulation of the balanced scorecard should not be made to individuals within the organization.
FALSE
The scorecard objectives and measures, once developed, become the means for articulating and communicating the strategy of the organization to its employees and managers.
Incentives must be structured and resources allocated to support the strategy chosen.
TRUE
Performance expectations must be established once objectives and measures have been executed and advertised.
FALSE
Once objectives and measures have been DEFINED and COMMUNICATED, performance expectations must be established.
Compensation should be based on performance and paid based on percentage of objective achieved.
TRUE
Outcome measures that are a result of past efforts are called __________ measures.
LAG
Outcome measures that are expressed in monetary terms are called __________ measures.
FINANCIAL
Dissatisfied customers are an example of a __________ measure
NONFINANCIAL
The targets aimed at transforming the organization within a period of 3 to 5 years are called __________ targets.
STRETCH