Chapter 9: Controlling

Question 1

The process of ascertaining whether organizational objectives have been achieved; if not, why not; and determining what activities should then be taken to achieve objectives better in the future

Answer 1

Controlling

Question 2

Are expressed in quantity or monetary terms

Answer 2

Sales Targets

Question 3

Are expressed in quantity or quality

Answer 3

Production Targets

Question 4

Are expressed in terms of rate of absences

Answer 4

Worker Attendance

Question 5

Is expressed in number of accidents for given periods

Answer 5

Safety Record

Question 6

Are expressed in quantity or monetary terms for given periods

Answer 6

Supplies Used

Question 7

Type of control measure undertaken when management anticipates problems and prevents their occurence

Answer 7

Feedforward Control

Question 8

Type of control measure undertaken when operations are already ongoing and activities to detect variances are made

Answer 8

Concurrent Control

Question 9

Type of control measure undertaken when information is gathered about a completed activity, and in order that evaluation and steps for improvement are derived

Answer 9

Feedback Control

Question 10

Provides the basic control mechanism for the organization

Answer 10

Strategic Plan

Question 11

Recommends a direction for financial activities

Answer 11

Financial Plan

Question 12

Indicates the expenditures, revenues, or profits planned for some future period regarding operations

Answer 12

Operating Budget

Question 13

Measure employee performance

Answer 13

Performance Appraisal

Question 14

Pertain to those that contain data on various developments within the firm

Answer 14

Statistical Reports

Question 15

The framework within which the objectives must be pursued

Answer 15

Policies

Question 16

A plan that describes the exact series of actions to be taken in a given situation

Answer 16

Procedure

Question 17

Contains information about the company’s gross income, expenses, and profits.

Answer 17

Income Statement

Question 18

Is a more elaborate approach used in controlling activities. Under this method, one account appearing in the financial statement is paired with another to constitute a ratio

Answer 18

Financial Ratio Analysis

Question 19

These ratios assess the ability of a company to meet its current obligations

Answer 19

Liquidity Ratios

Question 20

These shows the extent to which current assets of the company can cover its current liabilities

Answer 20

Current Ratio

Question 21

This is a measure of the firm’s ability to pay off short-term obligations with the use of current assets and without relying on the sale of inventories

Answer 21

Acid-test Ratio

Question 22

These ratios show how effectively certain assets or liabilities are being used in the production of goods and services

Answer 22

Efficiency Ratios

Question 23

This ratio measures the number of times an inventory is turned over each year

Answer 23

Inventory Turnover Ratio

Question 24

This ratio is used to measure utilization of the company’s investment in its fixed assets, such as its plant and equipment

Answer 24

Fixed Asset Turnover

Question 25

This is a group of ratios designed to assess the balance of financing obtained through debt and equity sources

Answer 25

Financial Leverage Ratios

Question 26

This ratio shows how much of the firm’s assets are financed by debt

Answer 26

Debt to Total Assets Ratio

Question 27

This ratio measures the number of times that earnings before interest and taxes cover or exceed the company’s interest expense

Answer 27

Times Interest Earned Ratio

Question 28

These ratios measure how much operating income or net income a c company is able to generate in relation to its assets, owner’s equity, and sales.

Answer 28

Profitability Ratios

Question 29

This ratio compares the net profit to the level of sales

Answer 29

Profit Margin Ratio

Question 30

This ratio shows how much income the company produces for every peso invested in assets

Answer 30

Return on Assets Ratio

Question 31

This ratio measures the returns on the owner’s investment

Answer 31

Return on Equity Ratio

Question 32

Is one undertaken to determine the efficiency and effectivity of the activities of an organization.

Answer 32

Internal Audit