Responsibility Accounting Defines an Operating Center That Is Responsible for Revenue

question 156

Multiple Choice

Responsibility accounting defines an operating center that is responsible for revenue and costs as a(n) : (CMA adapted)

• A) profit center.
• B) revenue center.
• C) division.
• D) operating unit.

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Definitions:

Raw Materials

The basic materials from which products are manufactured or made, typically used in the early stages of the production process.

On Account

Refers to purchases made or services rendered on a credit basis, implying that payment will be made at a future date.

Raw Materials Inventory

Stocks of basic materials that are used in the production process before undergoing manufacturing.

Work-in-Process Inventory

This refers to the goods that are in the middle of the manufacturing process but are not yet completed.