Accounting Terminology
Listed Below Are Seven Technical Accounting Terms Introduced

Accounting terminology
Listed below are seven technical accounting terms introduced or emphasized in this chapter:
Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
______ (a) Costs that jointly benefit several responsibility centers of the business and that do not vary significantly with changes in sales volume.
______ (b) The amount charged by a responsibility center for the goods it sells to another responsibility center.
______ (c) A common measure of investment center performance.
______ (d) A responsibility center of a business that may be evaluated by the return earned on assets.
______ (e) The subtotal in a responsibility income statement that is most useful in evaluating the short-term effects of various marketing strategies on profitability.
$$\begin{array} { | l | l | } \hline \text { Cost Center } & \text { Contribution Margin } \\\hline \text { Residual Income } & \text { Committed Costs } \\\hline \text { Profit Center } & \text { Common Fixed Costs } \\\hline & \text { Transfer Price } \\\hline\end{array}$$

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(a) Common fixed costs
(b) Tra...

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