Which one of the following statements is correct? Responsibility accounting ensures that:
A)there is strict control over responsibility for resource allocation
B)management accountants accept responsibility for their monthly management reports
C)problems identified by analysing variances are tracked to their source
D)standard costing systems are implemented in accordance with accounting standards

Question

Quizplus · Accepted Answer

Responsibility accounting is a system of accounting that focuses on evaluating the performance of individuals and departments in an organization based on their responsibilities. It involves tracking and analyzing variances between actual and budgeted results and tracing these variances to the individuals or departments responsible for them. Therefore, option C is the correct statement because responsibility accounting helps to identify the source of problems and assign responsibility for corrective actions. Option A is incorrect because responsibility accounting does not necessarily involve strict control over resource allocation. Option B is incorrect because responsibility accounting is not about holding management accountants accountable for their reports. Option D is incorrect because implementing standard costing systems is a separate accounting process and not directly related to responsibility accounting.

Which One of the Following Statements Is Correct? Responsibility Accounting