In a Responsibility Accounting Environment, Upper Managers Evaluate the Performance

question 100

Multiple Choice

In a responsibility accounting environment, upper managers evaluate the performance of the unit managers based

• A)on those items over which the unit managers have control.
• B)not only on costs, but also on revenues.
• C)on the overall profit of the organization.
• D)on their units' operations and an allocated share of common costs.

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Definitions:

Entrepreneur

A person who establishes, arranges, and manages one or more businesses, assuming higher-than-usual financial risks to achieve this.

"Invisible Hand"

A metaphor introduced by Adam Smith to describe how individual self-interest and competition can lead to social and economic benefits.

Price Mechanism

The manner in which the prices of goods or services affect the supply and demand of those goods or services, and how this interaction determines the allocation of resources.

Equity

The ownership interest held by shareholders in a corporation, represented by their shares of the company.