Which of the following steps in designing an accounting-based performance measure includes decisions such as defining assets as total assets or net assets in the calculation of return on assets?
A) choosing performance measures that align with top management's financial goals
B) choosing the time horizon of each performance measure
C) choosing the details for each performance measure
D) choosing a target level of performance

Question

Quizplus · Accepted Answer

Choosing the details for each performance measure includes decisions such as defining the components of the measure and the calculation method. This would involve deciding whether to use total assets or net assets in the calculation of return on assets, as stated in the question. The other options (A, B, and D) do not specifically involve this decision.

Which of the Following Steps in Designing an Accounting-Based Performance