Budgets coupled with responsibility accounting provide feedback to top management about the performance relative to the budget of different responsibility center managers.

Question

Quizplus · Accepted Answer

Budgets and responsibility accounting work in conjunction to provide feedback to top management about the performance of different responsibility center managers. Budgets set a standard for expected performance, while responsibility accounting enables the allocation of costs and revenues to specific managers or departments, allowing for a comparison between actual performance and the budget. This feedback helps top management identify areas of success and weakness in the organization and take appropriate action.

Budgets Coupled with Responsibility Accounting Provide Feedback to Top Management