Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
15 Cards in this Set
- Front
- Back
|
What is responsibility accounting?
|
Measurement of management performance based on what they can control.
|
|
|
In DECENTRALIZED organizations, management control is ususally established by...
|
Dividing the organization into segments, responsibility centers.
|
|
|
Name four types of responsibility centers.
|
Cost center, Revenue center, Profit center, Investment center
|
|
|
What is a cost center?
|
Segment of organization where NO REVENUE is generated & the manager is only responsible for costs.
|
|
|
Give examples of cost centers.
|
Service (custodial), staff (personnel), and production centers.
|
|
|
What is a Revenue center?
|
Organizational unit whose manager is responsible only for REVENUES.
|
|
|
Give examples of revenue centers.
|
Sales and Marketing depts
|
|
|
What is a Profit center?
|
Organizational unit whose manager is responsible for REVENUES and COSTS.
|
|
|
Give examples of profit centers.
|
Stores or product lines
|
|
|
What is an investment center?
|
An organizational unit whose manager is responsible for return on investments (revenues, costs, & profit)...the size of the profit in relation to the investment.
|
|
|
What is responsibility accounting in terms of the accounting field?
|
The accounting procedures and reports used to measure the performance of responsibility centers.
|
|
|
Management uses responsibility accounting to support...
|
Goal Congruence
|
|
|
What is goal congruence?
|
When the goals of individual segments/departments meet the goals of the entire organization
|
|
|
A fundamental concept of responsibility accounting is...
|
Controlibility...managers should only be responsible for what they can control.
|
|
|
Most managers should not be held responsible for which costs?
|
Depreciation and Insurance exp
|
