accounting II Final exam .docx

Requirement 6 total asset data were provided in this

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Requirement 6. Total asset data were provided in this problem. If you were to gather this information from an annual report, how would you measure total assets? Describe your measurement choices and some of the pros and cons of those choices. Most companies use the    average  beginning  ending  asset balance since the income used in the ROI calculation is earned over the year. Management must also decide whether they wish to use the gross book value of assets or the net book  value of assets.  The    gross  net  book value is often used because it is easily pulled from the balance sheet. However, ROI using that  value will artificially rise over time due to    acquisitions of property  cash balance  depreciation  notes receivable  prepaid expenses  .
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Requirement 7. Describe some of the factors that management considers when setting its minimum target rate of return.             Requirement 8. Explain why some firms prefer to use RI rather than ROI for performance measurement. RI does a better job of    focusing on stockholders' and creditors rate of return  getting management to make sure their division is profitable  goal congruence  increasing the return on investment  . Requirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the  performance of investment centers. Investment centers are responsible for    both generating profit and efficiently managing a divison's assets.  efficiently managing a division's assets.  generating profit.  Budget versus actual performance reports are insufficient because they do not measure    how efficiently the division uses its assets.  how much income the division generated.  Choose from any list or enter any number in the input fields and then continue to the next question.
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  • Fall '15
  • MarieArcidiacono
  • Balance Sheet, Direct material price variance

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