Multiple Choice Questions 61.Which of the following is not one of the policies and procedures that make up an internal control system? A.Protect assets. B.Ensure reliable accounting. C.Guarantee a return to investors. D.Urge adherence to company policies. E.Promote efficient operations. 62.Managers place a high priority on internal control systems because the systems assist managers in […]
31.Which of the following directives can be issued by the president? A.Constitutional amendment B.Judicial decision C.Legislation D.Executive order E.Legislative bill 32.Executive order 11246, signed by President Lyndon Johnson, required all federal contractors and subcontractors to: A.deny payments to private contractors based on the availability of money. B.pay taxes for the capital goods exported from other countries […]
71) Maxine, Inc. bought a machine on January 1, 2012 for $48,000. The machine is expected to last for 8 years, after which it will be worthless. What is the book value of the machine on Maxine’s balance sheet at December 31, 2012? A) $48,000 B) $44,000 C) $6,000 D) $42,000 72) Maxine, Inc. bought a machine on January 1, 2012 for […]
21) Sterling Supply uses a periodic inventory system. Sterling Supply sold 25 globes during March. Other data for March includes: Mar. 1 Balance 30 @ $12 11 Purchased 20 @ $15 25 Purchased 10 @ $10 Round per unit cost to two decimal places. Ending inventory under the weighted-average method is: A) $281.25. B) $155.00. C) $443.45. D) $168.75. 22) […]
21) Indicate the proper journal to use to record each of the following transactions. Use S for sales journal, P for purchases journal, CR for cash receipts journal, CP for cash payments journal, and G for general journal. a)Owner investment of cash________ b)Owner withdrawal of cash________ c)Payment of accrued salaries________ d)Sales of furniture in exchange for a note receivable________ e)Receipt of payment on account________ […]
88.Which of the following descriptions would not fit the definition of a liability? a. Present obligation for future payment. b. Result of past transaction. c. Obligation to deliver services already paid for. d. Future obligation for future salary payments. 89.Usually, failure to record a liability means failure to record a(n) a. revenue. b. asset. c. expense. d. note. […]
Objective 18.5 1) The Peric Manufacturing Shop produces motorcycle parts. Typically, 12 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $40.00 per unit. Spoiled pieces may be disposed at $8.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 3,000 […]
148.Identify the statement below that is true. A.If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions. B.The trial balance is a book of original entry. C.Another name for the trial balance is the chart of accounts. D.The trial balance is a list of all accounts from the ledger with their balances at a […]
31. An example of extrinsic motivation is
A. challenging work.
B. variety of work.
C. promotion.
D. social interaction.
Extrinsic motivation depends on rewards (such as pay and benefits) controlled by an external source.
32. In agency theory, the _____ seeks to direct the behavior of the _____.
A. owner; principal
B. agent; principal
C. manager; agent
D. principal; agent
As per the agency theory, the principal is a person who seeks to direct another person's behavior. An agent is a person who is expected to act on behalf of a principal.
33. Research shows that owner-controlled and manager-controlled firms differ in which manner?
A. Owners like to change ownership more often than managers.
B. Managers are less likely to maximize short-run performance and pay.
C. Managers prefer relatively little risk in their pay.
D. Owners pursue more perquisites.
Managerial compensation in manager-controlled firms lay more emphasis on base salary and a lesser emphasis on uncertainty bonuses or incentives.
34. Which of the following is not a type of agency cost that arises in managerial compensation?
A. Management's desire for perquisites
B. Management's risk aversion
C. Management's desire for outcome-based pay systems
D. Management's focus on short-term performance and pay
Outcome-based pay systems help minimize agency costs.
35. Which of the following is not a feature of outcome-oriented principal-agent contracts?
A. When profits are high, compensation goes up.
B. The principal must invest in monitoring information.
C. Agents require a compensating wage differential.
D. Risk is increased for the agent.
Behavior-based contracts require that principal invest in monitoring in order to overcome information asymmetry.
36. According to agency theory, when a compensation system aligns the interests of the agent with the principal's own interests, the compensation system should
A. be behavior oriented.
B. reduce agency costs.
C. be outcome oriented.
D. reduce risks.
The agency theory says that the principal must choose a contracting scheme that helps align the interests of the agent with the principal's own interests thereby reducing agency costs.
37. Which of the following compensation systems would not be classified as an outcome-oriented contracting scheme (using agency theory terminology)?
A. Stock options
B. Profit sharing
C. Commissions
D. Merit pay
Merit pay is a behavior-oriented contracting scheme.
38. Which of the following factors would support the use of a behavior-based contract between principals and agents?
A. A tradition of using outcome-oriented contracts
B. R&D-oriented jobs
C. Outcome uncertainty
D. Employer has the ability to pay
In the case of outcome uncertainty, agents are exposed to greater risk and so would prefer behavior-based contracts.
39. Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off.
A. performance-reward
B. risk-reward
C. motivation-reward
D. ability-reward
Agency theory is of particular value in compensation management because of its emphasis on the risk-reward trade-off, an issue that needs close attention when companies consider variable pay plans.
40. ______ refers to decisions about whether to join or remain with the organization.
A. Membership behaviors
B. Identification behaviors
C. Organizational gregariousness
D. Associative habits
Membership behaviors are decisions about whether to join or remain with the organization.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more