A department that incurs costs (or expenses)?

Question

A. Service centre.
B. Production centre.
C. Profit centre.
D. Costs centre.
E. Subsidiary centre.

Answer 1

D. Cost center

An accounting term used to refer to a department in a business that incurs expenses but does not generate revenue directly.

A Service Center on the other hand is an activity that performs specific technical or administrative services primarily for the internal operations of the organisation and charges users for its services and hence does generate revenue.

Answer 2

A. That is why the IT department is first to go in a cutback by companies. It is a tax write off expense to outsource where an employee is a liability.