Internal Accounting Systems, Including Performance Measures, Affect Behavior

question 1

Multiple Choice

Internal accounting systems, including performance measures, affect behavior. It is often suggested that people pay attention to the dimensions of their work performance that are measured and rewarded. When, if ever, should these systems be revised?

• A)Extremely seldom: it is too costly
• B)Rarely: people understand how to perform under the present system
• C)Sometimes: whenever it can be shown that significant dysfunctional results exist
• D)Often: whenever management consultants develop a 'new and improved' system or measure
• E)Never

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Definitions:

Limited Partnership

A partnership where some members have limited liabilities to the amount they invest, while at least one partner has unlimited liability.

Extinguishing

The act of putting an end to something, such as extinguishing a debt, a legal obligation, or a fire.

Dissolution

Dissolution is the process of formally ending the existence of a legal entity such as a company or partnership.

Winding Up

The process of dissolving a company by selling its assets, paying off creditors, and distributing the remaining assets to shareholders.