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ACCT4 Chp 11
Game Code: 1000002
English
12
Public
Responsibility Accounting Systems
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A business segment whose manager has control over cost but has no control over revenue or investments in operating assets.
Cost center
15
An organization in which decision-making authority is not confined to a few top executives but rather is spread throughout the organization.
Decentralized organization
15
A business segment whose manager has control over cost, revenue, and investments in operating assets.
Investment center
15
Net operating income divided by sales.
Margin
15
Cash, accounts receivable, inventory, plant and equipment, and all other assets held for operating purposes.
Operating Assets
15
A department in which the central purposes of the organization are carried out.
Operating department
15
A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.
Profit center
15
The net operating income that an investment center earns above the minimum required return on its operating assets.
Residual income
15
Any business segment whose manager has control over costs, revenues, or investments in operating assets.
Responsibility center
15
Net operating income divided by average operating assets. It also equals margin multiplied by turnover.
Return on investment (ROI)
15
A department that does not directly engage in operating activities; rather, it provides services or assistance to the operating departments.
Service department
15
Sales divided by average operating assets.
Turnover
15
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