COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Characteristics of responsibility accounting system include all of the following except that,
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Cost centers are responsible for revenues as well as common costs
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The system should encourage employee involvement and participation
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Each level of management is responsible for its department’s operations and employees
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Responsibility for performance according to budget must be linked to the appropriate authority
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Explanation:
Detailed explanation-1: -Features of Responsibility Accounting Responsibility accounting system can be implemented only on the basis of due information of input and output. The monetary term of inputs is costs, and outputs are correspondingly called revenues. Hence, cost and revenue information is crucial for responsibility accounting.
Detailed explanation-2: -Accounting centre is not a part of responsibility accounting.
Detailed explanation-3: -Before discussing those factors, let’s explore the five types of responsibility centers: cost centers, discretionary cost centers, revenue centers, profit centers, and investment centers.
There is 1 question to complete.