The achievement of financial objectives tends to be a leading indicator of a company's performance, while the achievement of strategic objectives tends to be a lagging indicator of a company's future financial performance. True or false? Support and explain your answer.
What will be an ideal response?
A company's financial performance measures are actually lagging indicators that reflect the results of past decisions and organizational activities. But a company's past or current financial performance is not a reliable indicator of its future prospects-poor financial performers often turn things around and do better, while good financial performers can fall upon hard times. The best and most reliable leading indicators of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's competitiveness and market position are stronger or weaker. The accomplishment of strategic objectives signals that the company is well positioned to sustain or improve its future performance.
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Suppose, the cost of production of a widget in Mexico is 5 pesos. Assume that initially the exchange rate between the peso and the dollar is 2 pesos per dollar. Later, the exchange rate changes to 2.5 pesos per dollar. In the initial situation, a widget sold in the U.S. would be priced at ____; after the change in the exchange rate, the widget would be priced at ____.
A. $2.50; $2.00 B. $2.50; $3.12 C. $0.50; $0.40 D. $0.40; $0.50
The clerk who opens the mail routinely steals remittances. Describe a specific internal control procedure that would prevent or detect this fraud
The major retailers in a shopping center, typically large department stores or big-box stores, are referred to as the ________ stores.
A. anchor B. leader C. parasite D. location rival E. alpha
Chu Enterprise's inventory increased during the year. On the basis of this information, income reported under absorption costing:
A. will be the same as that reported under variable costing. B. will differ from that reported under variable costing, the direction of which cannot be determined from the information given. C. will be less than that reported in the previous period. D. will be lower than that reported under variable costing. E. will be higher than that reported under variable costing.