A Separate Company Unit Responsible for Its Own Cost and Revenue

question 62

Multiple Choice

A separate company unit responsible for its own cost and revenue is referred to as which of the following?

• A) Centralized organization
• B) Decentralized organization
• C) Department
• D) Job specialty
• E) Profit center

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Definitions:

Accounts Receivables

Represents money owed to a company by its customers for goods or services delivered but not yet paid for.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets, without selling inventory.

Liquidity

The ease with which an asset, or security, can be converted into ready cash without affecting its market price.