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Responsibility Accounting Is A System of Control Where Responsibility Is
Responsibility Accounting Is A System of Control Where Responsibility Is
Anthony & Reece-Responsibility Accounting is that type of management accounting that collect and reports both planned actual accounting information in terms of responsibility centers
If Mr. X Manager of a department prepares the cost budget of his department. then he will be made responsible for keeping the budget under control's will be supplied with full information of cost, incurred by his department. In case the cost is more then the budgeted cost, then X will find out reason and take necessary corrective measures will be personally responsible for the performance of his department
2 Information of both Planned and Actual 3. Identification of Responsibility Centers 4 Assigning Costs to Individuals and limiting their Efforts to Controllable Costs 5 Transfer Pricing Policy
Responsibility For
and non-controllable factors and activities at various levels of responsibility is specified and defined broadly.
Performance
reports are prepared by the responsible person to provide information to the users team.
Determination of responsibility centers Setting up of targets Tracking of performance Correction of deviated course of action
1.It introduces the sound system of control. 2.Every person individually accountable for their work assigned and performed by them. 3.It is effective tool of cost control and cost reduction. 4.It is very useful in applying budgetary control and standard costing. 5.It help the management to make an effectives delegation of authority and required responsibility as well. 6.It facilitates the management to set realistic plans and budgets.
Difficult process Require more effort Provide irrelevant information Time consuming
A responsibility center that incurs costs but does not directly generate revenues.
Warranty Dept