The Manager of a Profit Centre Should Not Be Responsible

question 48

Multiple Choice

The manager of a profit centre should not be responsible for which of the following types of decisions?

• A) Deciding which supplier should be used for the purchase of direct materials.
• B) Establishing the number of employees that will need to work each day.
• C) Deciding whether or not their segment should purchase additional machinery.
• D) Deciding whether or not to accept a special order from a customer.

---

Definitions:

Debits

Entries on the left side of a double-entry bookkeeping system that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet or in an individual's bank account.

Assets

Resources owned or controlled by a person or company, expected to bring future economic benefits.

Credits

Accounting entries that increase liabilities or equity on the balance sheet, or decrease an asset or expense account on the income statement.