Organizing a Business Begins with

question 313

Multiple Choice

Organizing a business begins with

• A) acquiring the necessary resources.
• B) choosing the best qualified employees.
• C) developing an efficient plan of action.
• D) determining the work to be done.

Recognize the evaluation measures for different types of centers (cost, profit, investment).

Understand the principles for allocating costs to departments.

Distinguish between direct expenses and those requiring allocation due to joint benefits.

Appreciate the complexity in choosing a fair basis for expense allocation.

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Definitions:

Inventory

Inventory encompasses the goods and materials a business holds for the purpose of resale or production.

Management

The process of dealing with or controlling things or people, often within the context of business operations like organizing, planning, and overseeing.

Net Income

The net income of a company, calculated by subtracting all costs and taxes from its total revenue.

Writing Off

The accounting action of declaring an asset to be of no value and clearing it off the books, often due to irrecoverability or obsolescence.