Question :
Multiple Choice Questions
23.A responsibility accounting system measures the performance of : 1259673
Multiple Choice Questions
23.A responsibility accounting system measures the performance of each of the following centers except:
A. Profit center.
B. Investment center.
C. Control center.
D. Cost center.
24.The part of a business a particular manager is held responsible for is called a:
A. Cost center.
B. Profit center.
C. Investment center.
D. Responsibility center.
25.An example of a profit center is:
A. The accounting department in a manufacturing company.
B. The maintenance department of a university.
C. The furniture department of a retail department store.
D. The human resources department in a hospital.
26.The primary difference between profit centers and cost centers is that:
A. Profit centers generate revenue.
B. Cost centers incur costs.
C. Profit centers are evaluated using return on investment criteria.
D. Profit centers provide services to other centers in the organization.
27.An investment center:
A. Is a profit center for which management is able to objectively measure the cost of the assets used in the center’s operations.
B. Is a cost center for which management is able to identify the original amount invested.
C. May be either a cost center or a profit center.
D. Is a subunit of the organization that provides services to other centers within the organization.
28.Disneyland is one of several theme parks owned by The Walt Disney Company. Disneyland should be evaluated as:
A. An investment center.
B. A cost center.
C. An entertainment center.
D. A profit center (other than an investment center).
29.Disneyland charges visitors for admission to the park but not for individual rides or attractions. “Splash Mountain” is one of the rides in Disneyland. The Walt Disney Company should evaluate “Splash Mountain” as:
A. A revenue center.
B. A cost center.
C. An investment center.
D. A profit center (other than an investment center).
30.San Francisco’s famous St. Francis Hotel is owned by Westin Hotel and Resort Group. Westin should evaluate the St. Francis as:
A. A cost center.
B. A historical landmark.
C. An investment center.
D. A profit center (other than an investment center).
31.One of the unique services provided by San Francisco’s St. Francis Hotel is cleaning and polishing coins (pocket change) for the guests. From the standpoint of hotel management, this “money laundry” should be viewed as:
A. A contribution center.
B. A cost center.
C. An investment center.
D. A profit center (other than an investment center).
32.Cost centers are evaluated primarily on the basis of their ability to control costs and:
A. Their return on assets.
B. Residual income.
C. The quantity and quality of the services they provide.
D. Their contribution margin ratio.
