Which of the Following Responsibility Centres Can Be Evaluated Using

question 8

Multiple Choice

Which of the following responsibility centres can be evaluated using residual income?

• A) Profit centres
• B) Revenue centres
• C) Cost centres
• D) Investment centres

---

Definitions:

Significant Influence

This refers to the power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.

Intra-entity Transfers

Transactions involving the transfer of goods, services, or resources within the same legal entity.

Deferred Intra-entity Gross Profits

Profits resulting from intra-entity transactions that are not immediately recognized for accounting purposes but deferred to future periods.

Separate Income Tax Returns

Tax documents filed by individuals or entities separately, as opposed to joint or consolidated filings.