COST ACCOUNTING
PERFORMANCE MEASUREMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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All profit centers are responsibility centers, but not all responsibility centers are profit centers.
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True
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False
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Explanation:
Detailed explanation-1: -Aprofit center is a responsibility center having both revenues and expenses. Because segmental earnings equal segmental revenues minus related expenses, the manager must be able to control both of these categories.
Detailed explanation-2: -A Profit Centre is a division of an organization responsible for its profits and losses. It can be a business unit, geographical area, or product line.
Detailed explanation-3: -Profit Center Definition In accounting, a profit center is a type of responsibility center. A responsibility center is an organizational subunit the manager of which is responsible for certain financial and non-financial performance measures.
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