34. A cost center is a unit of a business that incurs costs but does not directly generate revenues.

34.
A cost center is a unit of a business that incurs
costs but does not directly generate revenues. All of the following are
considered cost centers except:
A.
Accounting department.

B.
Purchasing department.

C.
Research department.
D.
Advertising department.

E.
All of these could be considered cost centers.

35.
A
unit of a business that not only incurs costs, but also generates revenues, is
called a:
A.
Performance center.

B.
Profit center.

C.
Cost center.

D.
Responsibility center.

E.
Expense center.

36.
A
profit center:
A.
Incurs costs, but does not directly generate
revenues.

B.
Incurs costs and directly generates revenues.
C.
Has a manager who is evaluated solely on
efficiency in controlling costs.

D.
Incurs only indirect costs and directly generates
revenues.

E.
Incurs only indirect costs and generates revenues.

37.
An accounting system that provides information
that management can use to evaluate the profitability and/or cost effectiveness
of a department’s activities is a:
A.
Departmental accounting system.

B.
Cost accounting system.

C.
Service accounting system.
D.
Revenue accounting system.

E.
Standard accounting system.

38.
A
department that incurs costs without directly generating revenues is a:
A.
Service center.

B.
Production center.

C.
Profit center.

D.
Cost center.

E.
Performance center.

45. The difference between a
profit center and an investment center is
A.
an investment center incurs costs, but does not
directly generate revenues.
B.
an investment center incurs no costs but does
generate revenues.

C.
an investment center is responsible for
effectively using center assets.

D.
an investment center provides services to profit
centers.

E.
There is no difference; investment center and
profit center are synonymous.

46.
An
expense that does not require allocation between departments is a(n):
A.
Common expense.

B.
Indirect expense.

C.
Direct expense.
D.
Administrative expense.

E.
All of these.

47.
Expenses that are easily traced and assigned to a
specific department because they are incurred for the sole benefit of that
department are called:
A.
Direct expenses.

B.
Indirect expenses.

C.
Controllable expenses.

D.
Uncontrollable expenses.
E.
Fixed expenses.

48.
Expenses that are not easily associated with a
specific department, and which are incurred for the benefit of more than one
department, are:
A.
Fixed expenses.

B.
Indirect expenses.

C.
Direct expenses.

D.
Uncontrollable expenses.

E.
Variable expenses.

49.
Regardless
of the system used in departmental cost analysis:
A.
Direct costs are allocated, indirect costs are
not.

B.
Indirect costs are allocated, direct costs are
not.
C.
Both direct and indirect costs are allocated.

D.
Neither direct nor indirect costs are allocated.

E.
Total departmental costs will always be the same.

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