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NO.1 Which of the following is a characteristic of total quality management (TQM)?
A. Quality by final inspection.
B. Education and self-improvement.
C. On-the-job training by other workers.
D. Management by objectives.
Answer: B
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Explanation:
TQM is the continuous pursuit of quality in every aspect of organizational activities. One of the
means of achieving this is through employee training and empowerment.
NO.2 A company with many branch stores has decided to use its best-performing store as a
benchmark organization for the purpose of analyzing the accuracy and reliability of branch store
financial reporting.
Which one of the following is the most likely measure to be included in a financial benchmark?
A. High number of suppliers.
B. High amount of bad debt write-offs.
C. High level of employee participation in setting budgets.
D. High turnover of employees.
Answer: B
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Explanation:
Internal benchmarking is the application of best practices in one part of the organization (e.g., a
high-performing branch store) to its other parts (other branches). This process requires, among
other things, use of quantitative and qualitative measures. A key indicator for financial performance
measurement is the amount of bad debt write-offs. A high level of bad debt write-offs could
indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt
write-offs may result from recording fictitious sales.
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