Chapter 7: Financial Responsibility Centres Flashcards

1
Q

What are the core elements of financial responsibilty centres?

A
  • Financial responsibility
  • Planning / Budgeting
  • Incentive contracts
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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

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3
Q

How is a financial responsibility centre defined?

A

The individuals responsibilities are at least partially defined in financial terms.

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4
Q

What are the types of financial responsibility centres?

A

1.) Investment Centres
2.) Profit Centres
3.) Revenue Centres
4.) Cost Centres

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