In Relation to the Format of a Balance Sheet, Large

question 29

True/False

In relation to the format of a balance sheet, large and complex organisations will summarise assets under broad headings.

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Definitions:

Responsibility Centre

A business unit or department for which its manager is accountable for certain activities and financial performance.

Investment Centre

A business unit or division that is responsible for generating returns on the assets allocated to it, with managers typically evaluated on profitability and the efficiency of asset utilization.

Suboptimal Decisions

Choices or decisions made that are not the best possible ones, often resulting in less efficient or effective outcomes than could have been achieved.

Decentralisation

The distribution of decision-making power and operational responsibilities away from a central authority to lower levels in an organization.