A Fundamental Principle of Responsibility Accounting Is That

question 18

Multiple Choice

A fundamental principle of responsibility accounting is that

• A)managers are accountable only for items they control
• B)a manager's span of control should not exceed eight people
• C)structured reports should be prepared weekly
• D)the information flow is in one direction, top-down

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Definitions:

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased as a percentage of its previous value.

Net Operating Income

The profit generated from normal business operations, excluding expenses from interest and taxes.

Contribution Margin Ratio

The proportion of sales revenue that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Target Profit

The amount of net income a company aims to achieve for a specific period as part of its financial and operational planning.