Under the Notion of Controllability, It Is Most Appropriate for Top

question 79

Multiple Choice

Under the notion of controllability, it is most appropriate for top management to evaluate the profitability of an investment center in terms of:

• A) Profits generated in relation to the amount of capital invested in the unit.
• B) Returns expressed as a percentage.
• C) Profits expressed in absolute terms.
• D) Operating profit generated.
• E) Returns expressed in actual dollar amounts.

---

Definitions:

Liability

A financial obligation or debt that an entity owes to another party, which is expected to be paid in the future.

Unearned Revenue

Money received by a company for goods or services yet to be provided, recognized as a liability until the service or product is delivered.

General Journal

The general journal is a primary accounting record used to document all business transactions in chronological order, detailing debits and credits for each entry.

Accounts Payable

Short-term liabilities of a company, representing amounts owed to suppliers or creditors for goods and services received but not yet paid for.