Chapter 9 - Strategic Based Control T/F

Question 1

Activity-based responsibility accounting focuses on processes and uses both operational and financial measures.

Answer 1

True

Question 2

Activity-based responsibility accounting employs dynamic standards and emphasizes and supports continuous
improvement.

Answer 2

True

Question 3

A strategic-based responsibility accounting system transforms the strategy of a company into operational objectives and
measures.

Answer 3

True

Question 4

The most common form of strategic-based responsibility accounting system is the worksheet.

Answer 4

False

Question 5

In a strategic-based responsibility accounting system, stretch targets are established for individual performance
measures.

Answer 5

True

Question 6

The balanced scorecard is a strategic-based performance management system that identifies four perspectives.

Answer 6

True

Question 7

Strategy translation means specifying objectives and percentage of revenues from sale of products.

Answer 7

False

Question 7

The customer perspective defines the customer and market segments in which the business unit will compete.

Answer 7

True

Question 8

Customer value is the sum of realization and sacrifice what the customer gives up and receives.

Answer 8

False

Question 9

Strategic information availability include processes with real-time feedback.

Answer 9

True

Question 10

Performance measures are derived from a company’s vision, strategy, and objectives.

Answer 10

True

Question 11

To link measures to a strategy, they must be derived from management and be balanced.

Answer 11

False

Question 12

Double-loop feedback occurs when managers get information about the effectiveness and the validity of the strategy.

Answer 12

True

Question 13

The strategy map connects the balanced scorecard strategy with an organization’s administration.

Answer 13

False

Question 14

A testable strategy is a set of linked objectives aimed at an overall goal.

Answer 14

True

Question 15

In order for the balanced scorecard to succeed, the entire organization must be behind it.

Answer 15

True

Question 16

Articulation of the balanced scorecard should not be made to individuals within the organization.

Answer 16

False

Question 17

Incentives must be structured and resources allocated to support the strategy chosen.

Answer 17

True

Question 18

Performance expectations must be established once objectives and measures have been executed and advertised.

Answer 18

False

Question 19

Compensation should be based on performance and paid based on percentage of objective achieved.

Answer 19

True