A segment of a business responsible for both revenues and expenses would be called:
A) a cost center.
B) an investment center.
C) a profit center.
D) residual income.

Question

Quizplus · Accepted Answer

A profit center is responsible for generating revenues and incurring expenses, and has the goal of making a profit. Profit centers are often used by businesses to evaluate the performance of certain segments or divisions within the company. A cost center is responsible only for incurring expenses, while an investment center is responsible for generating revenues and making investments. Residual income is a financial measurement that evaluates the profitability of an investment after accounting for the cost of capital.

A Segment of a Business Responsible for Both Revenues and Expenses