Successful operation of a responsibility accounting system requires all of the following except:
A)Budgets prepared for each responsibility center.
B)The use of a bonus pool based on ROA (return on assets).
C)An accounting system that measures the performance of each responsibility center.
D)The preparation of timely performance reports.

Question

Quizplus · Accepted Answer

The use of a bonus pool based on ROA is not necessary for successful operation of a responsibility accounting system. However, budgets prepared for each responsibility center, an accounting system that measures performance of each center, and timely performance reports are essential components of a responsibility accounting system.

Successful Operation of a Responsibility Accounting System Requires All of the Following