What Is a Profit Centre

question 93

Multiple Choice

What is a profit centre?

• A)A division of a company that has never incurred a loss
• B)A responsibility centre that incurs costs and generates revenues
• C)A centre evaluated by the rate of return earned on the assets allocated to the centre
• D)A division of the company that has fewer costs than the other divisions

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Definitions:

Accounting Periods

Defined time frames in which financial transactions are recorded and financial statements are prepared.

Consolidation Worksheet

A tool used in preparing consolidated financial statements that details the financial activities of a parent company and its subsidiaries.

General Ledger

A comprehensive record of a company's financial transactions over the duration of its life, providing the foundation for its financial statements.

Working Papers

Documentation retained by accountants and auditors that records the evidence, procedures, and results of audits and other financial analysis.