Which of the Following Is Not Indicated as an Advantage

question 146

Multiple Choice

Which of the following is not indicated as an advantage of using nonfinancial performance measures, relative to financial performance measures, as part of an operational control system?

• A) Nonfinancial performance indicators are readily understandable by operating personnel.
• B) Nonfinancial performance indicators can be viewed as drivers of future financial performance.
• C) Nonfinancial performance indicators direct attention to precise problem areas that need attention.
• D) Nonfinancial performance measures are more reliable than financial performance measures.

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Definitions:

Net Cash Flow

The difference between the cash inflows and cash outflows in a business over a specified period.

Depreciation Expense

A non-cash expense recorded on the income statement, reflecting the gradual reduction of an asset's value over its useful life.

Net Loss

When expenses total more than revenue, the result is net loss.

Supplies on Hand

An accounting term representing the total value of the physical goods, materials, and supplies a company possesses that have not been used yet.