Companies Evaluate Performance of Subunits and Subunit Managers in Order

question 44

Multiple Choice

Companies evaluate performance of subunits and subunit managers in order to

• A)identify successful operations.
• B)influence the behavior of managers.
• C)determine areas that need improvement.
• D)All of these answer choices are correct.

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Definitions:

Financial Statements

Reports summarizing the financial performance, position, and cash flows of a business for a specific period, including balance sheet, income statement, and statement of cash flows.

Contra Accounts

Accounts used in accounting to reduce the value of a related account to derive its net balance; examples include accumulated depreciation.

Normal Balances

The side of an account (debit or credit) where increases to the account are recorded; assets and expenses typically have debit normal balances, while liabilities, equity, and revenue have credit normal balances.

Perpetual Inventory System

An inventory tracking system that updates item records in real-time as transactions occur, providing a constant current inventory level.