Responsibility accounting reports are used:
A) to determine which manager should be blamed if actual results do not comply with budgeted expectations.
B) to evaluate a department manager's effectiveness in generating revenues or controlling expenses.
C) to determine if the actual cost of the product is in line with costs of competitors.
D) only when actual results are below budgeted expectations.

Question

Quizplus · Accepted Answer

Responsibility accounting reports are used to evaluate a department manager's effectiveness in generating revenues or controlling expenses. These reports are used to assess the performance of an individual or department responsible for a specific function of the organization. It is used to hold the person responsible for their job function and helps in measuring their contribution towards the organization's success. Therefore, option B is the correct choice. The rest of the options are incorrect because responsibility accounting reports are not used solely to determine blame or compare costs with competitors, and they can be used irrespective of whether actual results are above or below budgeted expectations.

Responsibility Accounting Reports Are Used