ECONOMICS

Detailed explanation-1: -Responsibility Accounting is a system of control where responsibility is assigned for the control of costs. The persons are made responsible for the control of costs. Proper authority is given to the persons so that they are able to keep up their performance.

Detailed explanation-2: -The responsibility accounting system is a mechanism by which costs and revenue are accumulated and reported to the top management to make an effective decision. In addition, it gives freedom to individuals to amplify their skills to reduce the cost and increase the organization’s revenue.

Detailed explanation-3: -A responsibility accounting system uses the concept of controllable costs to assign managers the responsibility for costs and expenses under their control. Prior to each reporting period, a company prepares plans that identify costs and expenses under each manager’s control.

Detailed explanation-4: -It is also called profitability accounting. and activity accounting”. According to this definition, the organisation is divided into. various responsibility centres and each centre is responsible for its costs. The.