Multiple Choice QuestionA department that incurs costs, generates revenues, and is responsible for effectively using department assets is considered a(n):Multiple choice question.asset centerprofit centercost centerinvestment center
Question
Multiple Choice QuestionA department that incurs costs, generates revenues, and is responsible for effectively using department assets is considered a(n):Multiple choice question.asset centerprofit centercost centerinvestment center
Solution
The correct answer is "profit center". This is because a profit center is a part of a company that directly adds to its profits. A profit center is responsible for generating its own revenues and has control over the costs. It is a separate entity within a company and is treated as a separate business. The manager of a profit center is responsible for both revenues (sales) and costs (expenses), and their performance is usually evaluated based on the profit they generate.
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