ACTY 2110 - Ch. 10 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS
true True or false: In strongly decentralized organizations, even the lowest-level
managers can make decisions.
centralized Decision-making authority lies mostly with higher-level managers in strongly ______
organizations.
responsibility An area of business that a manager has control over and is accountable for is
called a(n) __ center.
controllability principle One of the most important concepts in responsibility accounting is the _____ _____
which states that managers should only be held responsible for what they are in
charge of.
b In decentralized organizations, decision-making authority is ___ _.
a.) not granted to the lowest-level managers
b.) spread throughout the organization
c.) confined to a few top executives
a Which of the following business segments would not be considered a cost
center?
a.) Retail outlet
b.) Accounting department
c.) Manufacturing facilities
d.) Personnel department
, The manager of a(n)____ center does not have control over revenue or the use of
investment funds.
c Which of the following is not a characteristic of decentralization?
a.) Decentralization puts the decision-making authority in the hands of those who
have the most information on day-to-day operations.
b.) Decentralization helps to train lower-level managers for higher level positions.
c.) Decentralization reduces how accountable lower-level managers are for the
outcomes of their decisions.
d.) Decentralization allows top management to concentrate on bigger issues, such
as overall strategy.
revenue/profit Sales quotas are often given to ___ center managers.
geographical, product, functional Responsibility centers can be based on _____ regions, _____ lines, ____ characteristics,
or some combination of the three.
b, c, d Responsibilities of a profit center manager may include ___ _.
a.) investing in long-term assets
b.) involvement in strategic initiatives related to product success
c.) contract negotiations
d.) controlling division costs
d According to the ____ managers should only be held accountable for what they
are actually in charge of.
a.) responsibility principle
b.) decentralization principle
c.) balanced scorecard
d.) controllability principle
false True or false: Cost centers have no impact on revenue.
A(n) ___ income statement is broken down by product line, region, or other area
of a business.
a Managers of cost centers are evaluated on ___ _.
a.) their ability to control costs and provide quality service
b.) the segment margin generated for their center
c.) revenues, costs, and the use of investment funds
d.) their ability to meet sales quotas
b The most common method of evaluating a profit center manager is based on the
______.
a.) capital expenditure plan
b.) segmented income statement
c.) revenue and sales goals
d.) quality of service provided within the organization
true True or false: In strongly decentralized organizations, even the lowest-level
managers can make decisions.
centralized Decision-making authority lies mostly with higher-level managers in strongly ______
organizations.
responsibility An area of business that a manager has control over and is accountable for is
called a(n) __ center.
controllability principle One of the most important concepts in responsibility accounting is the _____ _____
which states that managers should only be held responsible for what they are in
charge of.
b In decentralized organizations, decision-making authority is ___ _.
a.) not granted to the lowest-level managers
b.) spread throughout the organization
c.) confined to a few top executives
a Which of the following business segments would not be considered a cost
center?
a.) Retail outlet
b.) Accounting department
c.) Manufacturing facilities
d.) Personnel department
, The manager of a(n)____ center does not have control over revenue or the use of
investment funds.
c Which of the following is not a characteristic of decentralization?
a.) Decentralization puts the decision-making authority in the hands of those who
have the most information on day-to-day operations.
b.) Decentralization helps to train lower-level managers for higher level positions.
c.) Decentralization reduces how accountable lower-level managers are for the
outcomes of their decisions.
d.) Decentralization allows top management to concentrate on bigger issues, such
as overall strategy.
revenue/profit Sales quotas are often given to ___ center managers.
geographical, product, functional Responsibility centers can be based on _____ regions, _____ lines, ____ characteristics,
or some combination of the three.
b, c, d Responsibilities of a profit center manager may include ___ _.
a.) investing in long-term assets
b.) involvement in strategic initiatives related to product success
c.) contract negotiations
d.) controlling division costs
d According to the ____ managers should only be held accountable for what they
are actually in charge of.
a.) responsibility principle
b.) decentralization principle
c.) balanced scorecard
d.) controllability principle
false True or false: Cost centers have no impact on revenue.
A(n) ___ income statement is broken down by product line, region, or other area
of a business.
a Managers of cost centers are evaluated on ___ _.
a.) their ability to control costs and provide quality service
b.) the segment margin generated for their center
c.) revenues, costs, and the use of investment funds
d.) their ability to meet sales quotas
b The most common method of evaluating a profit center manager is based on the
______.
a.) capital expenditure plan
b.) segmented income statement
c.) revenue and sales goals
d.) quality of service provided within the organization
