Which of the following is not a valid reason for developing responsibility center information?
A)Responsibility center information is useful in deciding how to allocate resources among segments of the business.
B)Separately measuring the revenue and expenses of each responsibility center is a necessary step in developing financial statements for the business entity viewed as a whole.
C)Responsibility center information is useful in evaluating the performance of segment managers.
D)Responsibility center information helps management to quickly identify sections of the business that are performing poorly.

Question

Quizplus · Accepted Answer

Separately measuring the revenue and expenses of each responsibility center is not a valid reason for developing responsibility center information, as it is not a necessary step in developing financial statements for the business entity viewed as a whole. Financial statements can be prepared without separately measuring revenue and expenses for each responsibility center.

Which of the Following Is Not a Valid Reason for Developing