In responsibility accounting, information is used to:
I. Measure performance
II. Produce financial statements for external users
III. Motivate managers to perform well
A)I only
B)I and II only
C)II and III only
D)I and III only

Question

Quizplus · Accepted Answer

Responsibility accounting is a management control system that assigns responsibility to each segment of an organization to evaluate performance in terms of profitability. This system is used for internal reporting and decision-making purposes rather than external reporting. Therefore, options II is not applicable for responsibility accounting. The primary objectives of responsibility accounting are to measure performance and motivate managers to perform well. Therefore, options I and III are correct. Hence, the correct answer is D.

In Responsibility Accounting, Information Is Used To