Which of the Following Is NOT Descriptive of Responsibility Centers

question 21

Multiple Choice

Which of the following is NOT descriptive of responsibility centers?

• A)They are used to isolate a unit so that it can be evaluated separately from the rest of the corporation.
• B)Each responsibility center has its own budget and is evaluated on its use of budgeted resources.
• C)The responsibility center coordinates all the functional areas and project developments to implement the strategic decision plan.
• D)The center uses resources to produce a service or a product.
• E)A responsibility center is headed by the manager responsible for the center's performance.

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Definitions:

Treasury Stock

Treasury stock refers to shares that were issued and later reacquired by the issuing corporation, not considered while calculating earnings per share or dividends.

Stated Value

The value assigned to no-par value stock by the company's board of directors, which becomes the legal capital per share that must be retained in the business.

Net Loss

The amount by which expenses exceed revenues in a given period, resulting in a negative net income.

Par Value

The nominal or face value of a stock or bond, representing the value stated in the corporate charter or on the certificate.