Chapter 24, Problem 1QS

To determine

Concept Introduction:

Cost center:

Cost center incurs costs and does not generate the revenue directly

Investment Center:

Investment center takes care of revenue, cost and investment

Departmental Accounting System:

This is an accounting system which records the transactions of a particular department and shows its performance.

Operating Department:

Operating departments conducts the operations of business like manufacturing, Sales etc.

Profit Center:

Profit center generate revenue and incur expenses

Responsibility Accounting System:

This is an accounting system which shows responsibility for managers.

Service Department:

Service departments are assisting departments for operating department. Service departments are not directly engaged in main operations but they perform assisting works.

To Identify:

The terms for given descriptions

Answer to Problem 1QS

The terms for given descriptions are as follows:

Description	Term
A	1. Cost Center
	2. Investment Center
B	3. Departmental Accounting System
	4. Operating Department
F	5. Profit Center
C	6. Responsibility Accounting System
E	7. Service Department

Explanation of Solution

Term	Explanations	Description
1. Cost Center	Cost center incurs costs and does not generate the revenue directly	A
2. Investment Center	Investment center takes care of revenue, cost and investment	C
3. Departmental Accounting System	This is an accounting system which records the transactions of a particular department and shows its performance.	B
4. Operating Department	Operating departments conducts the operations of business like manufacturing, Sales etc.	D
5. Profit Center	Profit center generate revenue and incur expenses	F
6. Responsibility Accounting System	This is an accounting system which shows responsibility for managers.	G
7. Service Department	Service departments are assisting departments for operating department. Service departments are not directly engaged in main operations but they perform assisting works.	E