Question 1

Corrective action when performance is inadequate may be to simply adjust standards.

Accepted Answer

Adjusting standards can be a corrective action if they are found to be unrealistic or not aligned with current conditions, ensuring they are achievable and relevant.

Question 2

An example of a feedforward control would be to survey customers regarding product quality.

Accepted Answer

Feedforward control is a proactive management technique that aims to prevent problems before they occur by controlling the inputs into a process, rather than surveying customers regarding product quality, which is more aligned with feedback control, focusing on outputs.

Question 3

The systematic process of making activities consistent with standards and goals is called control.

Accepted Answer

Control involves monitoring and adjusting activities to ensure they are consistent with standards and goals.

Question 4

A ratio that measures the organisation's internal performance with respect to key activities defined by management is known as the activity ratio.

Accepted Answer

The given statement is true. Activity ratios are used to measure the efficiency of an organization in performing key activities such as inventory management, receivables collection, and asset utilization. They help management in identifying areas for improvement and optimization.

Question 5

The revenue budget shows the level of funds flowing through the organisation and the nature of cash disbursements.

Accepted Answer

The revenue budget primarily focuses on the income and revenue aspects of an organization, detailing expected income sources and amounts, rather than detailing cash disbursements which are typically covered in a cash flow budget or an expenditure budget.

Question 6

Concurrent control focuses on the organisation's outputs.

Accepted Answer

Concurrent control focuses on the processes and activities used to transform inputs into outputs, monitoring and adjusting ongoing activities and processes to ensure they meet standards and objectives.

Question 7

An expense budget lists forecasted and actual revenues of the organisation.

Accepted Answer

An expense budget lists forecasted and actual expenses, not revenues. It outlines the organisation's projected costs and tracks actual spending to help manage expenses.

Question 8

The use of cultural values,traditions,shared beliefs and trust to increase compliance with goals is called decentralised control.

Accepted Answer

Decentralised control involves using cultural values, traditions, shared beliefs, and trust to increase compliance with goals. Therefore, the statement is true.

Question 9

Feed-forward control is sometimes called preliminary or preventive quality control.

Accepted Answer

Feed-forward control is a type of quality control that is implemented to prevent defects from occurring in the first place. Therefore, it can be considered a form of preventive or preliminary quality control.

Question 10

Decentralised control represents the absence of control because visible rules,supervision and procedures are absent.

Accepted Answer

Decentralised control does not mean absence of control. It simply means that decision-making is spread out among various individuals or teams, rather than being controlled by a central authority. In a decentralised control system, there are still rules, procedures and supervision, but they may be more flexible and adaptable to local situations.

Question 11

An example of a concurrent control would be to analyse sales per employee per day.

Accepted Answer

Analyzing sales per employee per day is an example of a concurrent control because it involves measuring and monitoring a process as it is happening, in order to identify and correct any issues in real-time. This allows for quick and efficient adjustments to be made to improve performance and prevent potential problems from escalating.

Question 12

Total quality management engages the participation of all employees and has a defect target of 1.0 per cent or less.

Accepted Answer

Total Quality Management (TQM) aims for continuous improvement and often targets zero defects, not a specific percentage like 1.0%.

Question 13

A financial statement that summarises the organisation's financial performance for a given time intervals is known as a balance sheet.

Accepted Answer

A balance sheet is a financial statement that provides a snapshot of an organisation's financial position at a specific point in time, rather than a summary of its financial performance over a period of time. A statement of financial performance, also known as an income statement or profit and loss statement, is the financial statement that summarises an organisation's financial performance for a given time interval.

Question 14

A budget that plans and reports investments in major assets to be depreciated over several years is called a balance sheet budget.

Accepted Answer

A budget that plans and reports investments in major assets to be depreciated over several years is called a capital budget. A balance sheet budget focuses on the current and projected financial position of an organization, including assets, liabilities, and equity.

Question 15

An example of a feedback control would be to hire only college graduates because of their previous success in your organisation.

Accepted Answer

Hiring only college graduates is not an example of feedback control. Feedback control involves using information from past outcomes to adjust future actions or decisions in order to achieve a desired result. Hiring only college graduates based on their previous success in your organisation is an example of feedforward control, which involves using information from past outcomes to adjust current actions or decisions in order to prevent future problems or errors.

Question 16

The fundamental unit of analysis for a budget control system is called a responsibility centre.

Accepted Answer

A responsibility centre is a unit within an organization that is assigned specific responsibilities and is accountable for its performance. It is the fundamental unit of analysis for a budget control system as it enables the organization to evaluate the performance of different departments or units and monitor their expenditures to ensure they are within the allocated budget.

Question 17

The systematic process which manages regulate organisation activities to make consistent with expectations established implants,targets and standards of performance are known as organisational controls.

Accepted Answer

Organisational controls refer to the systematic process of managing and regulating organisation activities to ensure they align with established expectations, goals, targets and performance standards.

Question 18

A liquidity ratio shows the company's ability to meet its current debt obligations and is a measurement of the organisation's margin of safety.

Accepted Answer

A liquidity ratio, such as the current ratio or quick ratio, is designed to measure a company's ability to meet its current debt obligations using its current assets. This gives an indication of the company's margin of safety and its ability to comfortably pay its debts without relying on additional borrowing. Therefore, the statement is true.

Question 19

According to the feedback control model,feedback can be used to either establish strategic goals,or measure actual performance.

Accepted Answer

The feedback control model is primarily used to measure actual performance and compare it against established strategic goals, rather than to establish those goals.

Question 20

The final step of the feedback control model is either to do nothing if performance is adequate or to take corrective action if performance is inadequate.

Accepted Answer

This is correct as the final step of the feedback control model is to either maintain the status quo if performance is acceptable or to take corrective action if it is not. This helps to ensure that the organization continues to meet its goals and objectives.

Quiz 19: Managerial and Quality Control