Select the incorrect statement concerning the application of the controllability concept to responsibility accounting.
A) As a practical matter, control of costs or revenues may be shared rather than absolute.
B) The concept of control is crucial to an effective responsibility accounting system.
C) Managers lose motivation when they are held accountable for actions that are beyond their scope of control.
D) Each manager should be evaluated on the costs but not the revenues that are under his or her control.

Question

Quizplus · Accepted Answer

Each manager should be evaluated on both the costs and revenues that are under his or her control. This is because the concept of control is crucial to an effective responsibility accounting system, and managers should be held accountable for both the costs and revenues that they can control. Therefore, statement D is incorrect.

Select the Incorrect Statement Concerning the Application of the Controllability