Departments That Mostly Provide Services to Other Units and Charge

question 47

Multiple Choice

Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers.

• A)cost
• B)profit
• C)investment
• D)revenue

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Definitions:

Uncollectible Accounts

Accounts receivable that are considered irrecoverable and are written off as a loss by a business.

Perpetual Inventory System

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Aging of Receivables Analysis

A method used to assess the financial health of a company's accounts receivable by categorizing outstanding invoices by their due dates.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that is expected not to be collected.