Multiple Choice

Question 1
Which of the following serves as a support line function to key functional areas in an organization’s value chain?
A. Advertising
B. Manufacturing
C. Human resources management
D. Customer service

Question 2
From an ethical perspective, employees in each functional line area face ethical challenges and dilemmas that:
A. are common to the organization as a whole.
B. are unique to their departmental responsibilities.
C. are common to the industry.
D. can be both unique to their departmental responsibilities and common to the organization as a whole.

Question 3
What is the real ethical dilemma faced by the R&D department?
A. Product costs
B. Product quality
C. Production time
D. Product originality

Question 4
Marketers play the customer service card and therefore argue that since their customers are satisfied, the good outcome justifies the methods used to achieve that outcome no matter how misleading the messages or how unnecessary the product sold. This represents a __________ view of ethics.
A. utilitarian
B. universal ethics
C. descriptive
D. normative

Question 5
The finance function of an organization can be divided into all of the following areas EXCEPT which of the following?
A. Auditing function
B. Financial transactions
C. Accounting function
D. Marketing function

Question 6
The accounting profession is governed by a set of:
A. Generally Accepted Accounting Principles.
B. United States Accounting Principles.
C. International Financial Principles.
D. Corporate Ethical Principles.

Question 7
Illegal accounting practices include all of the following EXCEPT which one?
A. Taking questionable deductions
B. Overvaluing assets
C. Deferring receipts from one quarter to the next to manage tax liabilities
D. Underreporting income for tax purposes

Question 8
The least observed misconduct employees observed according to the NBES was:
A. misreporting of actual time worked.
B. abusive or intimidating behavior toward employees.
C. lying to employees and customers.
D. a situation that placed employee interests over organizational interests.

Question 9
Corporate __________ is/are the actions of an organization that are targeted toward the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all legal obligations.
A. social responsibilities
B. social obligations
C. conscience
D. citizenship

Question 10
Corporate __________ implies that an organization is run with an awareness of its obligation to society.
A. social responsibility
B. social obligation
C. conscience
D. citizenship

Question 11
The definition of corporate social responsibility assumes the corporation:
A. is operating in a competitive environment.
B. is committed to a retrenchment strategy.
C. complies with federal and state legal obligations.
D. is committed to a moderate growth strategy.

Question 12
The __________ approach to corporate management states that the only obligation of a corporation is to maximize profits for its shareholders.
A. shareholder
B. social contract
C. economic
D. instrumental

Question 13
What approach to corporate management is considered simplistic because it assumes that there are no external consequences to the actions of the corporation?
A. Shareholder approach
B. Social contract approach
C. Economic approach
D. Instrumental approach

Question 14
As early as 1969, it was recognized that corporations:
A. actions do not impact their external environment.
B. do not operate in an isolated environment.
C. can actually increase their profits by being socially responsible.
D. have a responsibility to shareholders before stakeholders.

Question 15
All of the following are major trends behind the CSR phenomenon EXCEPT for which one?
A. Sustainability
B. Globalization
C. The failure of the private sector
D. Knowledge

Question 16
The greatest period of reform in the U.S. produced all of the following EXCEPT for which one?
A. Unemployment laws
B. The minimum wage
C. Child labor laws
D. Sexual harassment laws

Question 17
Many if not most developing countries are governed by __________ regimes.
A. dysfunctional
B. effective
C. efficient
D. controlling

Question 18
Many CSR initiatives:
A. generate immediate financial gains to the organization.
B. do not generate long-term financial gains to the organization.
C. do not generate immediate financial gains to the organization.
D. generate enough financial gains to break even for the organization.

Question 19
Corporations pursue operational efficiency through detailed monitoring of their bottom line in all of the following areas EXCEPT:
A. ethical activities.
B. financial performance.
C. social activities.
D. environmental activities.

Question 20
A(n) __________ CSR encompasses philanthropic activities targeted toward programs that will generate the most positive publicity or goodwill for the organization.
A. Altruistic
B. Ethical
C. Economic
D. Strategic

Multiple Choice Answers

1.Which of the following is NOT a characteristic of a partnership?
a.Each general partner has unlimited liability for the debts of the partnership.
b.If one partner dies or leaves the partnership, the existing partnership is terminated.
c.The partnership income is subject to a federal income tax that is levied on the business but not on the partners
d.The existing partnership agreement is dissolved and a new agreement is formed when a new partner joins the partnership.
2.Ryan Fuller, a sole proprietor, entered into partnership with another individual. Fullers investment in the partnership included equipment that cost $32,00 when it was purchased. The equipment has a book value of $13,000 and a net agreed-on value of $16,000. In the financial records of the partnership, this equipment and its accumulated depreciation should be recorded at:
a. $16,000 and $0, respectively
b. $13,000 and 0$, respectively
c. $32,000 and $19,000 respectively
d.$16,000 and $3,000 respectively
3.The general ledger of a partnership will:
a.Not contain a separate drawing account for each partner.
b.Contain one capital account that reflects the total equity of all partners.
c.Not contain a capital account or accounts.
d.Contain a separate capital account for each partner.
4.The salary and interest allowances in a partnership profit-sharing agreement can best be described as:
a.Expenses of the business that are deducted from revenue in the determination of net income
b.Amounts on which each partner will not have to pay income tax.
c.A means of distributing net income in relation to the services provided and the capital invested by each partner.
d.A legel requirement in order for a partnership to be formed.

5.Partnership net income of $33,000 is to be divided between two partners, Elan Chan and Roy Anderson, according to the following arrangement: There will be salary allowances of $20,000 for Chan and $10,000 for Anderson, with the remainder divided equally. How much of the net income will be distributed to Chan and Anderson, respectively?
a.$22,000 and $11,000
b.$21,5000 and $11,500
c.$16,500 and $16,000
d.$21,000 and $12,000
6.Kara Johnson and Tyler Jones are partners, and each has a capital balance if $100,000. To gain admission to the partnership, Raiden Nash pays $60,000 directly to Johnson for one-half of her equity. After the admission of Nash, the total partners equity in the records of the partnership will be:

a.$200,000
b.$250,000
c.$260,000
d.$300,000
7.A corporation is owned by:
a.The individual who started the company
b.Its board of directors
c.The president of the corporation
d.Its stockholders
8.Which of the following statements is correct?
a. Shareholders have no personal liability for a corporations
b. A corporations profits are first taxed at the corporate tax rate and then taxed again at person income tax rates when the profits are paid to the stockholders in the form of dividends.
c. Limited liability partnership (LLP) partners have liability for their own actions and the actions of those under their control or supervision.
d. All of these statements are correct.
9. If only one class of stock is issued by a corporation, it is referred to as a _______stock.
a. Preferred
b. Company
c. treasury
d. common
10. A corporation has 1,000 shares of 10 percent, $50 par-value preferred stock and 10,000 shares of $5 par-value common stock outstanding. If the board of directors decides to distribute dividends totaling $40,000, the common stockholders will receive a dividend of +______________ a share.
a. $5.00
b. $4.00
c. $3.50
d. $3.75
11. The entry to record the issuance of 1,000 shares of $10par-value common stock for $14 a share consists of a debit to Cash for:
a. $14,000 and a credit to Common Stock for $14,000.
b. $10,000 and a credit to Gain on Sale of Common Stock for $4,000
c. $14,000 and a credit to Paid-in Capital in Excess of Par-Value-Common Stock for $4000 and a credit of $10,000 to common stock.
d. $10,000 and a credit to Treasury Stock for $4,000

12.Which of the following statements is correct?
a.Market value is the figure selected by the organizers of the corporation to be assigned to each share of stock for accounting purposes.
b. If there is only one class of stock, the stock is called preferred stock.
c. In the event of liquidation, preferred stockholders have a claim on assets before that of common stockholders.
d. None of these statements is correct.

 
13. The Preferred Stock account is shown in the_________________section of the balance sheet.
a. assets
b. current liabilities
c.long-term liabilities
d.stockholders equity
14.When the amount of future taxes that will be paid as a result of MACRS depreciation deduction taken in this and prior years, an adjustment for the future taxes is made with a debit to _____and a credit to_____.
a. Tax Expense;Deferred Income Tax Liability
b, Deferred Income Tax Liability; Tax Expense
c.Tax Expense;Deferred Income Tax Asset
d.Deferred Income Tax Asset;Tax Expens

Expert Answers

TCO 10) Not all pricing methods apply to the market place. In manufacturing it is common practice to determine the cost of a product as it moves through it transformation to a finished product. (1) Explain why a transfer price is required (10 points) and (2) provide an example of the application of a transfer price (10 points). (Points : 20)

 

(TCO 11) Terry LeMay is unclear as to the difference between the income statement of a merchandising company and a manufacturing company. (1) Describe and provide an example of an income statement of a merchandising company and (2) compare to an example of an income statement of a manufacturing company (10 points). (Points : 20)

 

Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how adequate records can satisfy the purpose of internal control (10 points) and (2) provide an example of how this control could be implemented (10 points). (Points : 20)

 

To promote better management control of business centers financial responsibilities are assigned to managers. There are three basic types of responsibility centers. (1) Explain how a cost center operates (10 points) and (2) provide an example of its application in business. (10 points). (Points : 20)

 

To evaluate the financial operation and health of a business ratio analysis is used. (1) Provide the formula for Working Capital and explain how it is computed (10 points) and (2) provide an example of how this ratio can be used in decision making in business (10 points). (Points : 20)

Planning for capital investments is an important function of management. You are provided with the following data concerning a proposed capital investment: cash cost $220,000, net annual cash flows $40,000, present value factor of cash inflows for ten years 5.65 (rounded). Determine the net present value, and indicate whether the investment should be made. (1) Explain the pros and cons of using this method to evaluate a capital expenditure (10 points) and (2) show all computations required to arrive at the correct solution. (15 points). (Points : 25)

 

(TCO 6) To adequately plan for the success of the business a budget must be developed. (1) Indicate the benefits of budgeting (10 points) and (2) state the essentials of effective budgeting (15 points). Include textbook page references to identify where the correct answer was located.

 

Financial statement analysis is used by investors, creditors and managers of business to evaluate the operation and health of the business. This information is in part the basis for decision making. (1) Identify ratios used to evaluate the profitability of a company (10 points) and (2) provide an example of how the results of this analysis could be used to make business decisions.

 

There are three different forms of business; sole-proprietor, partnership and corporation. (1) Explain why a corporation’s government regulations may be a disadvantage (10 points) and (2) as a stockholder explain why a stockholder would want to own preferred stock.
At the Vicksburg Company actual sales are $1,200,000 and break-even sales are $840,000. Compute (a) the margin of safety in dollars and (b) the margin of safety ratio. (1) Explain how the analysis is to be performed (10 points) and (2) Show all computations required to arrive at the correct answer.

Warsaw Products has a factory machine with a book value of $90,000 and a remaining useful life of 4 years. A new machine is available at a cost of $250,000. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $600,000 to $500,000. Prepare an analysis showing whether the old machine should be replaced or retained. (1) Explain how the analysis is to be performed (10 points) and (2) Show all computations required to arrive at the correct answer.

Expert Answers

(TCO5) As a manager, how would you overcome the barriers to effective goal setting?

(TCO6) If you were considering starting you own business, what are the four major types of information would you include in your business plan?
( TCO7) Briefly discuss two of the reasons for individual resistance to change and give a workplace example of each.

(TCO8) Briefly explain what is meant by objective and judgmental performance evaluation. Discuss two methods of judgmental evaluation.

(TCO9) As a manager, in what types of situations should you use written communication? Briefly discuss the reasons why written communication would be best in these situations.

(TCO10) Would you rather work in a company with bureaucratic or decentralized control? Why?

(TCO1) Managers can be classified using two classification schemes. Discuss these two classification schemes and how they are interrelated.

(TCO2) Describe how on-demand movies on cable are a threat of substitute product to Blockbuster.

(TCO3) Discuss how the Sarbanes-Oxley Act promotes ethical leadership within organizations.

(TCO4) An organization that is diverse can gain a competitive advantage over their competitors. Discuss at least three ways diversity can lead to a competitive advantage for an organization.