A Cost Center Is a Unit of a Business That

question 91

Multiple Choice

A cost center is a unit of a business that incurs costs but does not directly generate revenues. Which of the following would definitely not be considered a cost center?

• A) Accounting department.
• B) Purchasing department.
• C) Research department.
• D) Advertising department.
• E) Pharmacy in a grocery store.

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Definitions:

Financial Distress

A scenario in which a corporation is unable to fulfill or struggles with settling its debts to those it owes money.

Earnings Per Share

A financial ratio indicating the amount of profit attributed to each outstanding share of a company's common stock, calculated as net income divided by the number of shares.

Debt To Equity Ratio

An indicator of financial leverage obtained by dividing a business's total debts by the equity owned by its stockholders.

Operating Income

Operating Income is the amount of profit realized from a business's operations, after deducting operating expenses such as wages, depreciation, and cost of goods sold.