Match each of the following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-A responsibility centre in which a manager is responsible only for sales
A)Centralization
B)Revenue centre
C)Profit centre
D)Cost centre
E)Investment centre
F)Decentralization

Question

Quizplus · Accepted Answer

A revenue centre is a responsibility centre in which a manager is responsible only for generating revenue, such as through sales.

Answer: C
 A profit centre is a responsibility centre in which a manager is responsible for both revenues and expenses, and ultimately the profit generated by the centre.

Answer: D
 A cost centre is a responsibility centre in which a manager is responsible only for controlling costs, such as in a support function like IT or HR.

Answer: E
 An investment centre is a responsibility centre in which a manager is responsible for both generating revenue and controlling costs, as well as making investment decisions for the centre.

Answer: A
 Centralization refers to the degree to which decision-making authority is concentrated at the top of the organization, while decentralization refers to the degree to which decision-making authority is delegated to lower-level managers or employees. It is a concept separate from the different types of responsibility centres.

Match Each of the Following Terms with Their Correct Description