| A | B |
|---|
| Organizational set-up were all major decisions are made by top management: | Centralization. |
| The process of reporting and evaluating financial results by units is called: | Responsibility Accounting. |
| Financial Accounting Rules require public corporations release data for these. | Industry Segments |
| A Budget Performance Report compares: | Predicted figures with the real bills. |
| Which is more centralized - the Marines or a business franchise? | The Marines! |
| Which is more centralized - a democracy or a dictatorship? | A Dictatorship. |
| Organizational set-up with departments, divisions, etc. and their managers plan and control those units: | Decentralization. |
| Expenses that your division has influence over | Controllable Expense or Costs |
| Industry Segments may be set up as: | Geographic areas, Product Lines, Customer Type, Departments, or any other way the firm wishes. |
| Revenue generation you have influence over: | Controllable Revenue. |
| Which is more Decentralized - a university or the Marines? | A University |
| Service Departments provide | Some service to other departments. |
| Cost Centers are accountable only for | Costs (i.e., expenses) |
| The most widely used "responsibility center" is the | Cost Center. |
| Profit Centers are responsible for | Generating Sales Revenues and Controlling Costs (i.e. expenses). |
| These responsibility centers are widely used in retailing businesses, such as grocery stores, and department stores. | Profit Centers |
| These responsibility centers often operate as totally independent companies. | Investment Centers |
| ROI means | Return On Investment |
| These responsibility centers often sell their own corporate stock and corporate bonds as well as releasing their own corporate annual reports full of Financial Accounting results | Investment Centers |
| This center can exist in a larger center of the same type. | Cost Center |
| ROI is basically calculated by: | Net Income divided by Total Assets |
| Profit Margin X Investment Turnover = | Return On Investment |
| Profit Margin is found by: | Net Income (from Operations) divided by Sales Revenue |
| Investment Turnover is found by: | Sales divided by Total Assets (same as Invested Assets) |
| Residual Income means | Leftover Income |
| The amount one unit charges (for its work or products) to another unit in the same firm is called: | Transfer Price |
| The 3 types of Transfer Prices are: | Cost, Negotiated, and Market Price |
