Responsibility accounting

1. Responsibility accounting

2. It is a system of control where responsibility is assigned for the control of costs. • Persons are made responsible for the control of costs. • Proper authority given to persons so that they are able to keep up their performance. • Performance not upto the standards – persons are personally responsible for it. • Emphasis is on men rather than on systems.

3. “Responsibility accounting is the name given to that aspect of the managerial process dealing with the reporting of information to facilitate control of the operations and evaluation of performance.”

4. Features

5. Responsibility centres • For effective control, a large firm is usually divided into meaningful segments, departments or divisions. • These divisions of an organization are called responsibility centres. • Represent the sphere of authority or decision points in an organization.

6. Types of responsibility Centres

7. Advantages of Responsibility Accounting