ECONOMICS

Detailed explanation-1: -Responsibility accounting functions most effectively in decentralized organizations. Under a responsibility accounting system, fewer expenses are charged against managers, the higher one moves upward in an organization.

Detailed explanation-2: -A responsibility accounting system facilitates decentralization by providing information about the performance, efficiency, and effectiveness of organizational subunits and their managers and is the key management control tool in a decentralized organization.

Detailed explanation-3: -Responsibility Accounting System Decentralization allocates expenses and costs to decentralized managers based on what they need at a given time. Therefore, decentralized managers have financial control and authority over their respective operational units.

Detailed explanation-4: -Accounting centre is not a part of responsibility accounting. Responsibility accounting basically refers to a system in which different divisions of the organisation are established as responsibility centres. Was this answer helpful?

Detailed explanation-5: -It creates a sense of efficiency within individual employees as their work and achievements will be reviewed. It guides the management to plan and structure the future expenditure and revenue of a company. Being a cost control tool, it creates ‘cost consciousness’ among workers.