A Profit Center Is

question 25

Multiple Choice

A profit center is

• A) a responsibility center that always reports a profit.
• B) a responsibility center that incurs costs and generates revenues.
• C) evaluated by the rate of return earned on the investment allocated to the center.
• D) referred to as a loss center when operations do not meet the company's objectives.

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Definitions:

Impossibility of Performance

A legal doctrine where a party may be released from a contract due to unforeseen events making fulfillment unfeasible.

Subject Matter Destroyed

A situation where the physical or substantive basis of a case or matter has been eliminated or rendered irrecoverable.

Illegal

pertains to actions or activities that are prohibited by law and subject to legal penalties.

Liquidated Damages

A predetermined amount of money that must be paid as damages for failure to perform under a contract, the amount of which is stipulated within the contract itself.