Most Large Organizations Establish Responsibility Centers (Sections, Departments, Divisions, Etc

question 64

Essay

Most large organizations establish responsibility centers (sections, departments, divisions, etc.) in order to delegate decision-making authority to the individuals who are best suited to make decisions in those particular centers. Consider the following responsibility centers and classify each as most likely being a cost center, profit center, or investment center.

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Definitions:

Company Books Adjustment

Modifications made to the accounting records to correct errors or update the accounts as required.

NSF Check

A check that cannot be processed due to insufficient funds in the account on which it was drawn, often resulting in a fee.

Bank Statement Adjustment

The process of modifying the balance shown on a bank statement to reflect transactions or corrections not yet recorded by the bank.

Company Books Adjustment

Modifications made to the accounting records of a company to correct errors or align them with actual financial activity.