ECONOMICS

Detailed explanation-1: -The components of responsibility accounting include inputs and outputs, identification of responsibility center, target, and actual information, responsibility between organization structure and responsibility center, etc.

Detailed explanation-2: -There are three types of responsibility centers-expense (or cost) centers, profit centers, and investment centers. In designing a responsibility accounting system, management must examine the characteristics of each segment and the extent of the responsible manager’s authority.

Detailed explanation-3: -Accounting centre is not a part of responsibility accounting.