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Revenue Center
In business, a revenue center is a division Division or divider may refer to: Mathematics *Division (mathematics), the inverse of multiplication *Division algorithm, a method for computing the result of mathematical division Military *Division (military), a formation typically consisting ... that gains revenue from product sales or service provided. The manager in revenue center is accountable for revenue only. Overview A revenue center is one of the five divisions of a responsibility center – cost center, revenue center, profit center, contribution center and investment center. Cost centers, like revenue centers, only monitor costs, thereby making them a counterpart to the revenue center. Revenue centers only measure the output (in fiscal standings) and are therefore marketing establishments which are exempt from profit generation and accountability thereof. In a revenue center performance is measured by comparing actual sales to projected ones (as well as number of sa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for profit." Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business. The term is also often used colloquially (but not by lawyers or by public officials) to refer to a company, such as a corporation or cooperative. Corporations, in contrast with Sole proprietorship, sole proprietors and partnerships, are a separate legal entity and provide limited liability for their owners/members, as well as being su ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Division (organization)
A division, sometimes called a business sector or business unit (segment), is one of the parts into which a business, organization or company is divided. Overview Divisions are distinct parts of a business. If these divisions are all part of the same company, then that company is legally responsible for all of the obligations and debts of the divisions. In the banking industry, an example would be East West Bancorp and its primary subsidiary, East West Bank. Legal responsibility Subsidiaries are separate, distinct Commercial law, legal entities for the purposes of taxation, regulation and Legal liability, liability. For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it. The ''Houston Chronicle'' highlighted that the creation of a division "is substantially easier than developing subsidiaries. Because a division is an internal segment of a company, not an entirely separate enti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Responsibility Center
A responsibility center is an organizational unit headed by a manager, who is responsible for its activities and results. In responsibility accounting, revenues and cost information are collected and reported on by responsibility centers. Typical examples of responsibility centers are the profit center,Melumad, Nahum, Dilip Mookherjee, and Stefan Reichelstein.A theory of responsibility centers" ''Journal of Accounting and Economics'' 15.4 (1992): 445-484. cost center and the investment center. Profit center A profit center is characterized by the responsibility to choose inputs and outputs with a fixed level of investment. Performance evaluation A typical measurement for profit center management is the ability to maximize profits as they are responsible for both costs and revenues. Cost center A cost center is characterized by the lowest level of responsibility compared to the other two centers. Cost center managers are expected to produce as much output with a fixed ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Center (business)
A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but incur costs to the business, when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs. Types There are two main types of cost centres: * Production cost centres, where the products are manufactured or processed. Example of this is an assembly area. * Service cost centres, where services are provided to other cost centres. Example of this is the personnel department or the canteen. Examples * Marketing department * Human resources * Research and development * Work office * Quality assurance * Engineering * Logistics * Procurement Cost centres can be trimmed down to the smallest segregated tasks within Departments. It is not necessary to consider departments as outright cost centres. Some companies adopt a different ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Profit Center
A profit center is a part of a business which is expected to make an identifiable contribution to the organization's profits. Overview A profit center is a section of a company treated as a separate business. Thus profits or losses for a profit center are calculated separately. A profit center manager is held accountable for both revenue and costs (expenses), and therefore for profits. This means that the manager is accountable for driving the sales revenue generating activities which lead to cash inflows and at the same time controlling the cost-generating activities. This makes the profit center management more challenging than cost center management. Profit center management is equivalent to running an independent business because a profit center business unit or department is treated as a distinct entity enabling revenues and expenses to be determined and its profitability to be measured. Business organizations may be organized in terms of profit centers where the prof ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment Center
An investment center is a classification used for business units within an enterprise. The essential element of an investment center is that it is treated as a unit which is measured against its use of capital, as opposed to a cost or profit center, which are measured against raw costs or profits. The Investment Center takes care of Revenues, Cost and Assets, while a Profit Center deals with revenues and costs and Cost Centers with costs only. This is a clear sign of how the span of control and span of accountability grow from Cost Centers to Investment ones. The advantage of this form of measurement is that it tends to be more encompassing, since it accounts for all uses of capital. It is susceptible to manipulation by managers with a short term focus, or by manipulating the hurdle rate used to evaluate divisions. See also * Cost center * Profit center A profit center is a part of a business which is expected to make an identifiable contribution to the organization ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Management Accounting
In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. Definition One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. In other words, management accounting helps the directors inside an organization to make decisions. This can also be known as Cost Accounting. This is the way toward distinguishing, examining, deciphering and imparting data to supervisors to help accomplish business goals. The information gathered includes all fields of accounting that educates the administration regarding business tasks identifying with the financial expenses and decisions made by the organization. Accountants use plans to measure the overall strategy of operations within the organization. According to the Institute of Management Accountants (IMA), "Management accounting is a profession t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accounting Terminology
Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms. Accounting can be divided into several fields including financial accounting, management accounting, tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors, regulators and suppliers; and management accounting focuses on the measurement, ana ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
