Table of Contents
- 1 What is a responsibility center called that generates revenues and incurs costs and is also responsible for the investments made in operating assets?
- 2 Which responsibility centers generate revenues and costs?
- 3 What appears in a cash budget?
- 4 How do I find my responsibility center?
- 5 How do you categorize the responsibility center?
What is a responsibility center called that generates revenues and incurs costs and is also responsible for the investments made in operating assets?
A unit of a business that generates revenues and incurs costs is called a: Profit center. an investment center is responsible for investments made in operating assets.
Which responsibility centers generate revenues and costs?
A profit center is a responsibility center having both revenues and expenses.
Which Centre is responsible for both revenue and expenses?
Profit Centre
Profit Centre: A profit centre is a segment of an organisation whose manager is responsible for both revenues and costs.
Which of the following is considered a responsibility center?
Five types of responsibility centers include cost centers, discretionary cost centers, revenue centers, profit centers, and investment centers. Cost centers are responsibility centers that focus only on expenses. Discretionary cost centers are responsibility centers that focus only on controllable expenses.
What appears in a cash budget?
A cash budget is prepared in advance and shows all the planned monthly cash incomings (receipts) and any planned cash outgoings (payments). It can identify any times where there may be a shortage of cash. It will clearly show where a business has more cash than expected (surplus ) or less cash than expected (deficit ).
How do I find my responsibility center?
A responsibility center is an organizational unit headed by a manager, who is responsible for its activities and results. In responsibility accounting, revenues and cost information are collected and reported on by responsibility centers.
What is an example of an investment center?
An investment center is a business unit that a firm utilizes with its own capital to generate returns that benefit the firm. The financing arm of an automobile maker or department store is a common example of an investment center.
What is meant by responsibility center?
How do you categorize the responsibility center?
Responsibility centers are often categorized by the degree of authority and responsibility given to the manager:
- Cost centers. In a cost center the manager is responsible only for costs.
- Profit centers. In a profit center the manager is responsible for its costs and revenues.
- Investment centers.