Successful Operation of a Responsibility Accounting System Requires All of the Following

question 75

Multiple Choice

Successful operation of a responsibility accounting system requires all of the following except:

• A)Budgets prepared for each responsibility center.
• B)The use of a bonus pool based on ROA (return on assets).
• C)An accounting system that measures the performance of each responsibility center.
• D)The preparation of timely performance reports.

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Definitions:

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, used in cash flow analysis.

Cash Inflows

Money received by a business, typically from operations, investments, or financing.

Completing Transactions

The process of finalizing a deal or sale, ensuring all necessary steps and documents are completed and approved.

Financing Activities

Transactions related to borrowing, repaying debts, issuing stocks, and paying dividends that affect a company's cash flow.