An accounting system that is set up to control costs and evaluate managers' performance by assigning costs to the managers responsible for controlling them is called a(n):
A) Responsibility accounting system.
B) Cost accounting system.
C) Activity-based accounting system.
D) Financial accounting system.
E) Managerial accounting system.

Question

Quizplus · Accepted Answer

Responsibility accounting system is designed to track the costs and revenues of individual responsibility centers, which are managed by individuals responsible for their control. This helps in evaluating the performance of managers and in improving accountability. Cost accounting system is a broader concept that includes various techniques and methods for measuring and analyzing costs for the purpose of improving decision making. Activity-based accounting system is a cost accounting method that focuses on identifying and measuring the costs of specific activities and their drivers. Financial accounting system is concerned with recording and reporting financial transactions and preparing financial statements for external stakeholders. Managerial accounting system is concerned with providing information to internal stakeholders for decision making and planning.

An Accounting System That Is Set Up to Control Costs