In a responsibility accounting system:
A)Controllable costs are assigned to managers who are responsible for them.
B)Each accounting report contains all items allocated to a responsibility center.
C)Organized and clear lines of authority and responsibility are only incidental.
D)All managers at a given level have equal authority and responsibility.
E)All of the choices are correct.

Question

Quizplus · Accepted Answer

Responsibility accounting system allocates controllable costs to managers who are responsible for them. This ensures that managers are accountable for the costs of their departments and have incentives to manage and control those costs effectively. The other choices are incorrect because accounting reports may only contain relevant items for a specific responsibility center, the system requires organized and clear lines of authority and responsibility, and managers may have different levels of authority and responsibility.

In a Responsibility Accounting System