COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The investment center is also responsible for income
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revenue center, not responsible for costs
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Cost centers are responsible for the company’s overall profit
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a profit center cannot turn into an investment center
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Detailed explanation-1: -An investment center is a center that is responsible for its own revenues, expenses, and assets and manages its own financial statements which are typically a balance sheet and an income statement.
Detailed explanation-2: -The investment centre manager has control over revenues, expenses and the amounts invested in the centre’s assets. He also formulates the credit policy which has a direct influence on debt collection, and the inventory policy which determines the investment in inventory.
Detailed explanation-3: -An Investment center is responsible for revenues and expenses, as well as earning a return on assets, An investment center is only responsible for revenues and expenses. A profit center is evaluated using contribution margin, while an investment center is evaluated using ROI.
Detailed explanation-4: -Investment Centre-This center is responsible for both investments and revenue. The investment manager can control expenses, income, the fund invested in assets, etc.