Question

What is responsibility accounting? Is it used at your current (or former) place of employment, and if not, would it work? Why or why not?

Answer 1

Responsibility accounting is an accounting system which decentralizes a big organization into small manageable responsibility centres. The main types of responsibility center are : revenue , cost , profit and investment

I work as a finance personnel in a telecommunication company and responsibility accounting is heavly used in the organization. Sales department is considered as the revenue center. Network department is considred as the cost center. The corporate office is considered as the investment center as it is responsible for investing the company's additional capital. The marketing department and commercial department are considered as profit centers as they drive pricing decisions.

It works in the favor of the organization as the accountability for each activity is very clear and aligned.