NAME

5 Written questions
1.

The use of budgets to control operations.

0%

INCORRECT: You gave no answer

ANSWER: Budgetary Control

2.

A measure of management's effectiveness in utilizing assets at its disposal in an investment center.

INCORRECT: You gave no answer
ANSWER: Return on Investment (ROI)

3.

A Projection of budget data for various levels of activity.

INCORRECT: You gave no answer
ANSWER: Flexible Budget

4.

Costs that are incurred for the benefit of more than one profit center.
INCORRECT: You gave no answer
ANSWER: Indirect Fixed Costs

5.

A projection of budget data at one level of activity.

INCORRECT: You gave no answer
ANSWER: Static Budget

5 Matching questions
1.

Noncontrollable Costs
INCORRECT: No answer given

a
Costs that relate specifically to a responsibility center and
are incurred for the sole benefit of the center.

ANSWER: Costs incurred indirectly

and allocated to responsibility

Contribution margin less controllable fixed costs.

center that are not controllable at

that level.

c
The review of budget reports by top management focused

2.

Controllable Margin

entirely or primarily on differences between actual results

and planned objectives.

INCORRECT: No answer given

d
ANSWER: Contribution margin less

controllable fixed costs.

A part of management accounting that involves

accumulating and reporting revenues and costs on the
basis of the manager who has the authority to make the
day-to-day decisions about the items.

3.

Responsibility Accounting
INCORRECT: No answer given

ANSWER: A part of management

e
Costs incurred indirectly and allocated to responsibility
center that are not controllable at that level.

accounting that involves

accumulating and reporting

revenues and costs on the basis of the

manager who has the authority to make
the day-to-day decisions about the items.

4.

Management By Exception
INCORRECT: No answer given

ANSWER: The review of budget

reports by top management
focused entirely or primarily on

differences between actual results and

planned objectives.

5.

Direct Fixed Costs

INCORRECT: No answer given

ANSWER: Costs that relate

specifically to a responsibility
center and are incurred for the sole

benefit of the center.

4 Multiple choice questions

1.

A responsibility center that incurs costs and also generates revenues.

(No Answer)
a. Cost Center
b. CORRECT: Profit Center
c. Segment
d. Investment Center

2.

A responsibility center that incurs costs but does not directly generate revenues.

(No Answer)
a. Profit Center
b. Segment
c. Investment Center
d. CORRECT: Cost Center

3.

The income that remains after subtracting from the controllable margin the minimum rate of return on a
company's average operating assets.

(No Answer)
a. Flexible Budget
b. Static Budget
c. CORRECT: Residual Income
d. Segment

4.

A cost over which a manager has control.

(No Answer)
a. Controllable Margin
b. CORRECT: Controllable Cost
c. Noncontrollable Costs
d. Indirect Fixed Costs

4 True/False questions
1.

Responsibility Reporting System A part of management accounting that involves accumulating and
reporting revenues and costs on the basis of the manager who has the authority to make the day-to-day
decisions about the items.
This is false. You gave no answer.
It should be Responsibility Reporting System The preparation of reports for each level of responsibility
in the company's organization chart..

2.

Investment Center A responsibility center that incurs costs but does not directly generate revenues.
This is false. You gave no answer.
It should be Investment Center A responsibility center that incurs costs, generates revenues, and has
control over decisions regarding the assets available for use..

3.

Segment A responsibility center that incurs costs but does not directly generate revenues.
This is false. You gave no answer.
It should be Segment An area of responsibility in decentralized operations..

4.

Decentralization A responsibility center that incurs costs but does not directly generate revenues.
This is false. You gave no answer.
It should be Decentralization Control of operations is delegated to many managers throughout the
organization..