(CMA)Responsibility accounting defines an operating centre that is responsible for revenue and costs as a(n):
A)Profit centre
B)Revenue centre
C)Division
D)Investment centre

Question

Quizplus · Accepted Answer

Responsibility accounting is the allocation of revenues, costs, and profits to the individual managers or departments responsible for them. A profit centre is an operating unit accountable for both revenues and expenses and is responsible for generating profits. As such, it is the most appropriate choice for defining an operating centre responsible for revenue and costs. Revenue centres are only responsible for generating revenue, while divisions and investment centres have broader responsibilities beyond revenue and cost.

(CMA)Responsibility Accounting Defines an Operating Centre That Is Responsible for Revenue