ECONOMICS

Detailed explanation-1: -The basic purpose of a responsibility accounting system is to motivate management to perform in a manner consistent with overall company objectives. The assignment of responsibility implies that some revenues and costs can be changed through effective management.

Detailed explanation-2: -Responsibility accounting systems generate financial and related nonfinancial information about the actual and planned activities of a company’s responsibility centers–organizational units headed by managers responsible for a unit’s performance.

Detailed explanation-3: -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.