The Reservations Department That Has Self-Contained Sales Operations at a Car

question 89

Multiple Choice

The reservations department that has self-contained sales operations at a car rental chain may be classified as a(n)

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

---

Definitions:

Temporary Account

A temporary account is used to track transactions during an accounting period, which is then transferred to a permanent account at the period's end, such as revenue and expense accounts.

Bad Debts Expense

Represents the amount of receivables a company does not expect to collect and is recorded as an expense.

Merchandise Inventory

The goods a company holds for the purpose of sale to customers in the normal course of business.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, reflecting the actual cash value of inventory.