What Responsibility Center Is Judged for Effectiveness Rather Than Efficiency

question 72

Multiple Choice

What responsibility center is judged for effectiveness rather than efficiency?

• A) investment center
• B) revenue center
• C) standard cost center
• D) profit center
• E) expense center

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Definitions:

Financing Activities

Financial transactions primarily involved with funding the company and its capital structure, including issuing debt, paying off debt, and equity transactions.

Issuing Debt

The process in which a corporation or governmental entity raises funds by selling bonds, bills, or notes to investors with a promise to pay back the principal along with interest on a specified date.

Acquiring Investments

The process of allocating resources, usually money, to purchase financial assets in the hope of generating income or capital appreciation.

Net Loss

The amount by which total expenses exceed total revenues for a specific period, indicating a financial loss for the entity.