The type of department that generates revenues and incurs costs, and its manager is responsible for the investments made in operating assets is called a(n):
A) Cost center
B) Service department
C) Responsibility center
D) Investment center
E) Profit center

Question

Quizplus · Accepted Answer

An investment center is responsible for generating revenues as well as incurring costs and its manager has the authority to make investment decisions in operating assets. Cost centers only incur costs, service departments provide support services, responsibility centers cover a wider spectrum of cost and revenue generation and profit centers only focus on generating revenues.

The Type of Department That Generates Revenues and Incurs Costs