Ken is advising the managing director, Lucy, of Alex plc of the advantages of setting standards and targets to help specify the levels of performance that underpin the company’s control system.
Which ONE of the following are should be one the main components of the company’s control system?
Select ONE answer:
- Follow-up action to correct adverse results or to exploit favourable variances
- Identification of deviations from the plan
- Measurement of ideal performance
- Devising the plan
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
- Correct == > Any control system should have the major components of Measurement Of Actual Performance And Comparison against Targets; Establishment of Standards or Targets to Express Planned Performance; and Follow-up Action to Correct Adverse Results or to Exploit Favourable Variances. The other choices are secondary.
- Not correct
- Not correct
- Not correct
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