production. This report will be shared with the production manager, Julia. This is an example of the role of managerial

Chapter 14: The Balanced Scorecard and Corporate Social Responsibility

True / False

• James, an accountant at Forta Company, is preparing a report showing the production shift data for the previous day’s

production. This report will be shared with the production manager, Julia. This is an example of the role of managerial accounting at work.

• True
• False

ANSWER: True

• James, an accountant at Forta Company, is preparing an income statement at the end of the year. It will be included in

the company’s annual report to be released to the public. This is an example of the managerial accounting function at Forta.

• True
• False

ANSWER: False

• Evaluating employee performance and making strategic decisions are two examples of how managerial accounting

information is used.

• True
• False

ANSWER: True

• Performance measurement systems are used to assess how well a company is performing relative to the goals the FASB

sets for the company.

• True
• False

ANSWER: False

• Performance measurement systems are used to prepare tax information needed by the IRS to assess a company’s

taxable income.

• True
• False

ANSWER: False

• Performance measurement systems are used to assess how well a company is meeting its own goals and objectives.
• True
• False

ANSWER: True

• Performance measurement systems use externally imposed benchmarks of the competitive landscape to assess internal

performance.

• True
• False

ANSWER: False

• Performance measurement systems use measures of current performance to assess how well a company is performing

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Name: Class: Date:

Chapter 14: The Balanced Scorecard and Corporate Social Responsibility

toward meeting its goals and objectives.

• True
• False

ANSWER: True

• It is important to gather as many accounting metrics as possible because they have intrinsic value and do not need a

context in which to be understood.

• True
• False

ANSWER: False

• It is important to gather meaningful accounting metrics to assess how well employees or units within a company meet

the company’s goals and objectives.

• True
• False

ANSWER: True

• Operating income and cash flow are examples of metrics used to assess quality control.
• True
• False

ANSWER: False

• Operating income and cash flow are examples of metrics used to assess a company’s financial condition.
• True
• False

ANSWER: True

• Accounting metrics, such as operating income, make business decision-making processes more complex.
• True
• False

ANSWER: False

• Accounting metrics, such as cash flow, are often used to simplify the business decision-making process.
• True
• False

ANSWER: True

• Materials price variances are examples of metrics used for measuring a sales department’s performance.
• True
• False

ANSWER: False

• Materials price variances are examples of metrics used for measuring a purchasing department’s performance.
• True
• False

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Name: Class: Date:

Chapter 14: The Balanced Scorecard and Corporate Social Responsibility

ANSWER: True

• Strategic performance measurement systems define and link strategic objectives to the performance metrics of a

company.

• True
• False

ANSWER: True

• Strategic performance measurement systems define and link strategic objectives to the external financial reports of a

company.

• True
• False

ANSWER: False

• Strategic performance measurement systems are commonly used by large companies around the world.
• True
• False

ANSWER: True

• The balanced scorecard is a marginally effective strategic performance management system.
• True
• False

ANSWER: False

• The balanced scorecard is named for its view of company performance focusing only on financial measures.
• True
• False

ANSWER: False

• The balanced scorecard focuses on lagging indicators such as actual sales volume rather than including leading

indicators such as customer satisfaction.

• True
• False

ANSWER: False

• The balanced scorecard has five performance perspectives: financial, learning and growth, internal processes,

customer, and supply chain.

• True
• False

ANSWER: False

• The balanced scorecard has four performance perspectives: financial, customer, learning and growth, and strategic.
• True
• False

ANSWER: False

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Name: Class: Date:

Chapter 14: The Balanced Scorecard and Corporate Social Responsibility

• The balanced scorecard incorporates only qualitative performance metrics.
• True
• False

ANSWER: False

• One of the objectives of the four balanced scorecard performance perspectives is to help management focus on

looking beyond typical financial measures of performance.

• True
• False

ANSWER: True

• Performance in the financial perspective of the balanced scorecard focuses on satisfying customers.
• True
• False

ANSWER: False

• Performance in the customer perspective of the balanced scorecard often focuses on the ability to obtain customers.
• True
• False

ANSWER: True

• Mason works at LoftCo, Inc., studying and improving operational efficiencies. The performance measures he gathers

include determining the number of defective units produced in a week. Mason is focused on the internal processes perspective of the balanced scorecard performance management system.

• True
• False

ANSWER: True

• Cassie works at LoftCo, Inc., studying effective ways to retain the company’s current customers. The performance

measures she gathers include determining the number of repeat customers each week. Cassie is focused on the internal processes perspective of the balanced scorecard performance management system.

• True
• False

ANSWER: False

• Jerome works at LoftCo, Inc., in research and development. The performance measures he gathers include assessing

progress toward developing a better form of biodegradable plastic packaging. Jerome is focused on the internal processes perspective of the balanced scorecard performance management system.

• True
• False

ANSWER: False

• Mason works at LoftCo, Inc., in an operations department focused on the internal processes perspective of the

balanced scorecard performance management system. It is critical that the work in this performance area is linked to at least one strategic objective within the company.

• True

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