Chapter 7: Financial Responsibility Centres Flashcards
1
Q
What are the core elements of financial responsibilty centres?
A
- Financial responsibility
- Planning / Budgeting
- Incentive contracts
2
Q
Name the advantages of financial results control systems!
A
+ financial objectives are paramount in for-profit firms
+ provide a summary measure of performance
+ most measures are relatively precise and objective
+ cost of implementation is often relatively small
3
Q
How is a financial responsibility centre defined?
A
The individuals responsibilities are at least partially defined in financial terms.
4
Q
What are the types of financial responsibility centres?
A
1.) Investment Centres
2.) Profit Centres
3.) Revenue Centres
4.) Cost Centres