Responsibility accounting defines an operating center that is responsible for revenue and costs as a(n)(CMA adapted)
A)profit center.
B)revenue center.
C)division.
D)operating unit.
E)investment center.

Question

Quizplus · Accepted Answer

Responsibility accounting divides an organization into operating units or segments and identifies the manager of each segment as responsible for its performance. A profit center is a segment that is responsible for revenue and costs and its manager has control over both. Therefore, responsibility accounting defines an operating center that is responsible for revenue and costs as a profit center.

Responsibility Accounting Defines an Operating Center That Is Responsible for Revenue