ESTUDYR
WGU D774 INTRO TO BUSINESS ACCOUNTING | OA |
OBJECTIVE ASSESSMENT | UPDATE | 100% CORRECT
1. Which responsibility center both incurs costs and generates revenues?
A. Cost center
B. Revenue center
C. Profit center
D. Discretionary cost center
Correct Answer: C. Profit center
Rationale: A profit center is evaluated on both revenues and expenses, making profitability the
key performance measure.
2. Which responsibility center manages controllable costs but does NOT directly generate
revenue?
A. Revenue center
B. Discretionary cost center
C. Profit center
D. Investment center
Correct Answer: B. Discretionary cost center
Rationale: Departments like HR and accounting incur controllable costs but contribute to
revenue only indirectly.
3. Which of the following is an example of a cost center?
A. Sales department
B. Corporate headquarters
C. Maintenance department
D. Regional division
Correct Answer: C. Maintenance department
Rationale: Cost centers focus solely on controlling expenses and do not generate revenue.
, ESTUDYR
4. What type of responsibility center controls costs, revenues, AND capital investments?
A. Profit center
B. Revenue center
C. Discretionary cost center
D. Investment center
Correct Answer: D. Investment center
Rationale: Investment centers are evaluated on return on investment and asset utilization.
5. Responsibility accounting is best described as:
A. Tracking only total company profit
B. Assigning costs equally across departments
C. Evaluating performance by responsibility center and manager
D. Preparing financial statements
Correct Answer: C. Evaluating performance by responsibility center and manager
Rationale: Responsibility accounting holds managers accountable for areas they control.
6. Which of the following is a product cost?
A. Advertising expense
B. Office rent
C. Direct labor
D. Sales commission
Correct Answer: C. Direct labor
Rationale: Product costs include direct materials, direct labor, and manufacturing overhead.
7. Which costs are included in prime costs?
A. Direct labor + overhead
B. Direct materials + direct labor
C. Overhead + selling expenses
D. Fixed costs + variable costs
WGU D774 INTRO TO BUSINESS ACCOUNTING | OA |
OBJECTIVE ASSESSMENT | UPDATE | 100% CORRECT
1. Which responsibility center both incurs costs and generates revenues?
A. Cost center
B. Revenue center
C. Profit center
D. Discretionary cost center
Correct Answer: C. Profit center
Rationale: A profit center is evaluated on both revenues and expenses, making profitability the
key performance measure.
2. Which responsibility center manages controllable costs but does NOT directly generate
revenue?
A. Revenue center
B. Discretionary cost center
C. Profit center
D. Investment center
Correct Answer: B. Discretionary cost center
Rationale: Departments like HR and accounting incur controllable costs but contribute to
revenue only indirectly.
3. Which of the following is an example of a cost center?
A. Sales department
B. Corporate headquarters
C. Maintenance department
D. Regional division
Correct Answer: C. Maintenance department
Rationale: Cost centers focus solely on controlling expenses and do not generate revenue.
, ESTUDYR
4. What type of responsibility center controls costs, revenues, AND capital investments?
A. Profit center
B. Revenue center
C. Discretionary cost center
D. Investment center
Correct Answer: D. Investment center
Rationale: Investment centers are evaluated on return on investment and asset utilization.
5. Responsibility accounting is best described as:
A. Tracking only total company profit
B. Assigning costs equally across departments
C. Evaluating performance by responsibility center and manager
D. Preparing financial statements
Correct Answer: C. Evaluating performance by responsibility center and manager
Rationale: Responsibility accounting holds managers accountable for areas they control.
6. Which of the following is a product cost?
A. Advertising expense
B. Office rent
C. Direct labor
D. Sales commission
Correct Answer: C. Direct labor
Rationale: Product costs include direct materials, direct labor, and manufacturing overhead.
7. Which costs are included in prime costs?
A. Direct labor + overhead
B. Direct materials + direct labor
C. Overhead + selling expenses
D. Fixed costs + variable costs
