ACCOUNTING

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4. Which of the following statements is true about organizational structure?

A. It is not applicable to informal organizations.

B. It is the arrangement or relationship of positions within an organization.

C. It is usually not seen in government and nonprofit organizations.

D. It does not require a lot of planning in small organizations.

E. It remains the same even as the company grows in size.

5. Which of the following statements is true about an organizational chart in the context of

organizational structure?

A. It only lists the financial assets of an organization.

B. It is essentially designed for the customers of an organization.

C. It can only be accessed by the owners of an organization.

D. It gives information about an organization’s chain of command.

E. It cannot represent the evolution or growth of an organization.

6. _____ is the division of labor into small, specific tasks and the assignment of employees to do a

single task.

A. Specialization

B. Delegation

C. Departmentalization

D. Outsourcing

E. Centralization

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7. _____ is the grouping of jobs into working units usually called units, groups, or divisions.

A. Downsizing

B. Specialization

C. Delegation

D. Departmentalization

E. Centralization

8. All of the following are approaches to departmentalization EXCEPT:

A. function.

B. product.

C. geographic region.

D. customer.

E. seniority.

9. Small businesses commonly employ:

A. line departmentalization.

B. customer departmentalization.

C. functional departmentalization.

D. product departmentalization.

E. geographical departmentalization.

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

10. A company that has departments for marketing, finance, personnel, and production is organized

by:

A. product.

B. function.

C. territory.

D. customer.

E. geographic region.

11. If the type of departmentalization used by an organization tends to emphasize departmental units

rather than the organization as a whole and decision making is slow, then these would be

weaknesses indicative of _____ departmentalization.

A. geographical

B. functional

C. product

D. customer

E. process

12. Which of the following concepts deals with giving employees the power to make commitments and

use resources to accomplish the assigned tasks?

A. Delegation of authority

B. Accountability

C. Downsizing

D. Departmentalization

E. Specialization

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

13. _____ is the principle that employees who accept an assignment and the authority to carry it out

are answerable to a superior for the outcome.

A. Accountability

B. Specialization

C. Decentralization

D. Delegation of authority

E. Centralization

14. Which of the following statements is true about delegation of authority in the context of an

organization?

A. It does not relieve the superior of accountability for the delegated job.

B. It does not give the employees the power to make decisions about using resources to

accomplish the assigned tasks.

C. It does not hold the employee to whom the authority was delegated accountable for the results

of the task.

D. It often puts additional pressure and burden on managers who are delegating tasks to

subordinates.

E. It is a concept found only in small businesses and proprietorships.

15. _____ is usually preferred when the decisions of a company are very risky and low-level managers

lack decision-making skills.

A. Decentralization

B. Delegation of authority

C. Centralization

D. Employee empowerment

E. Specialization

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

16. When an organization has a structure in which decision-making authority is delegated as far down

the chain of command as possible, it is said to be exercising:

A. centralization.

B. overcentralization.

C. downsizing.

D. overspecialization.

E. decentralization.

17. Span of management refers to the:

A. number of subordinates working for a manager.

B. experience in terms of years of managers in a company.

C. the duration of time required for an employee to get promoted to the manager’s position.

D. the number of roles that the management of an organization performs.

E. the number of managers working at the top management.

18. Which of the following statements is true about span of management?

A. According to experts, top managers should directly supervise more than 10 to 20 people.

B. A narrow span of management exists when a manager directly supervises only a large number

of subordinates.

C. Narrow spans of management are more common in decentralized firms.

D. A narrow span of management is appropriate when superiors and subordinates are not in

close proximity.

E. In narrow spans of management, the level of interaction between superiors and subordinates

is low, few problems arise, subordinates are highly competent.

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

19. Organizational layers, in the context of assigning responsibility in an organization, refer to:

A. the levels of management in an organization.

B. the levels of stakeholders present outside of an organization.

C. the levels of roles that an employee has to go through to acquire a position at the top

management.

D. the several roles in which the employees have job specializations in an organization.

E. the levels of communication through which an employee has to go through in order to

approach different departments.

20. Which of the following statements is true about organizational layers?

A. Administrative costs are lower in tall organizations when compared to flat organizations.

B. In a tall organization, the span of management is narrow.

C. Communication is faster in tall organizations when compared to flat organizations.

D. Flat organizations employ more number of managers compared to tall organizations.

E. Managers in tall organizations spend more time supervising and working with subordinates

when compared to mangers in flat organizations.

21. A disadvantage of line structure is that it:

A. results in excessive delegation of authority to employees.

B. makes decision making more complicated for managers.

C. provides no direct lines of authority.

D. creates work duplication and confusion.

E. requires managers to possess a wide range of knowledge and skills.

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

22. Which of the following statements is true about the line-and-staff structure?

A. It allows line managers to focus on their expertise in the business operation.

B. It creates intersecting lines of authority.

C. It eliminates overstaffing.

D. It provides clear and unambiguous lines of communication.

E. It gives staff managers authority over line managers.

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