31.CSO: 1A2a LOS: 1A2a
　　A change in the estimate for bad debts should be
　　a. treated as an error.
　　b. handled retroactively.
　　c. considered as an extraordinary item.
　　d. treated as affecting only the period of the change.
　　32. CSO: 1A2a LOS: 1A2d
　　Finer Foods Inc., a chain of supermarkets specializing in gourmet food, has been using the average cost method to value its inventory. During the current year, the company changed to the first-in, first-out method of inventory valuation. The president of the company reasoned that this change was appropriate since it would more closely match the flow of physical goods. This change should be reported on the financial statements as
　　a. cumulative-effect type accounting change.
　　b. retroactive-effect type accounting change
　　c. change in an accounting estimate.
　　d. correction of an error.
　　33.that was purchased this year has not helped reduce Cerawell’s unfavorable labor efficiency variances.
　　b. A competitor has achieved an unexpected technological breakthrough that has given them a significant quality advantage, and has caused Cerawell to lose market share.
　　c. Vendors have asked that the contract price for the goods they supply to Cerawell be renegotiated and adjusted for inflation.
　　d. Experienced employees have decided to terminate their employment with Cerawell and go to work for the competition.
　　34. CSO: 1B2a LOS: 1B2e
　　All of the following are advantages of the use of budgets in a management control system except that budgets
　　a. force management planning.
　　b. provide performance criteria.
　　c. promote communication and coordination within the organization.
　　d. limit unauthorized expenditures.
　　35.CSO: 1B2b LOS: 1B2e
　　In developing the budget for the next year, which one of the following approaches would most likely result in a successful budget with the greatest amount of positive motivation and goal congruence?
　　a. Permit the divisional manager to develop the goal for the division that in the manager’s view will generate the greatest amount of profits.
　　b. Have senior management develop the overall goals and permit the divisional manager to determine how these goals will be met.
　　c. Have the divisional and senior management jointly develop goals and objectives while constructing the corporation’s overall plan of operation.
　　d. Have the divisional and senior management jointly develop goals and the divisional manager develop the implementation plan.