The kind of responsibility center that would be evaluated by comparing the amount of income earned to the amount of assets invested is
A) a cost center.
B) an asset center.
C) an investment center.
D) a profit center.

Question

Quizplus · Accepted Answer

An investment center is responsible for both generating income and managing assets, so comparing the amount of income earned to the amount of assets invested is an appropriate way to evaluate its performance. Cost centers are evaluated based on the efficiency with which they manage costs, asset centers focus solely on managing assets, and profit centers are evaluated based on their ability to generate profit.

The Kind of Responsibility Center That Would Be Evaluated by Comparing