QUESTION 68
WHAT ARE THE DIFFERENCES BETWEEN COST, TRADING AND INVESTMENT CENTRES?
Why it’s important: As a manager it is extremely likely that you will have responsibility for one of the above centres.
Cost centres exist in nearly all organisations and you can expect to be responsible for one or two centres. Trading centres are less common, but you may find yourself in charge of one. Investment centres are usually run by a senior executive. You need to know the difference between all three centres and how income and expenditure is coded/allocated to them.
HOW INCOME, EXPENDITURE AND CAPITAL ITEMS ARE CODED AND ALLOCATED TO A PARTICULAR CENTRE:
All income and expenditure is coded to a specific account heading; for example, 01 for salaries.
A cost ...
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