A Profit Center and a Cost Center Both Generate Costs

question 13

True/False

A profit center and a cost center both generate costs.

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Definitions:

Executory Costs

Expenses related to ongoing maintenance and administration of a lease that are neither fixed nor included in the lease payments.

Annual Payments

Yearly amounts paid or received over the term of a financial instrument or agreement.

Lessor

The party in a lease agreement who owns the leased asset and grants the lessee the right to use the asset for a specified term in exchange for payment.

Amortization Policies

Guidelines or practices a company follows to systematically reduce the book value of its intangible assets over their useful life.