If a Segment of Business Is Considered a Profit Center

question 12

Multiple Choice

If a segment of business is considered a profit center:

• A)it must sell products or services to customers outside the business.
• B)only revenue is accumulated for the segment.
• C)no indirect expenses can be allocated to the segment.
• D)both revenue and cost data must be accumulated for the segment.

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Definitions:

Efficiently

Conducting an activity in such a manner that it achieves the maximum output with the minimum input or resources, without waste.

Rival

An entity competing against another for the same objective or for superiority in the same field of activity.

Excludable

A feature of a product or service enabling its owner to exclude others from usage unless payment is received.

Property Rights

The legal rights to possess, use, and dispose of assets, including property and intellectual property.