In Terms of Using Accounting Data to Build an Effective

question 23

Multiple Choice

In terms of using accounting data to build an effective management control system,what is the nirvana fallacy?

• A)It is the tendency to use market-based transfer prices.
• B)It is the system of using accounting data for both decision management and decision control.
• C)It is the tendency to use cost centers rather than profit centers as the core of business structure.
• D)It is the belief that a perfect control system can be invented that will stop all fraud.

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Definitions:

Primary Drives

Basic, innate motivations that are necessary for survival, such as hunger, thirst, and avoidance of pain.

Homeostasis

The process by which living organisms regulate their internal environment to maintain a stable, constant condition in response to external changes.

Internal Environment

refers to the conditions, processes, and elements within an organization that influence its activities and choices.

Hierarchy of Motives

A structure that ranks human needs and motivations in order of importance, from basic physiological needs to self-actualization.