Question

In responsibility accounting,

Multiple Choice

• All of the above statements regarding responsibility accounting are true.

• decentralized organizations use responsibility accounting to link lower-level managers’ decision-making authority to the goals and objectives of the organization.

• an investment center is a segment with control over investment funds but not costs or revenues.

• all segments have control over costs and revenues.

Answer 1

Ans:

Responsibility accounting is where decentralized organizations use responsibility accounting to link lower-level managers’ decision-making authority to the goals and objectives of the organization. Responsibility accounting is a concept of identifying resposibility of each manager and measuring their performance based on assignment of responsibility. It consists of delegating decision making powers into a systemeatical manner in the organisation so that top management can focus on long term objectives.

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