What Is Responsibility Account?

What are the types of responsibility?

ResponsibilityCollective responsibility.Corporate social responsibility.Duty.Legal liability.Legal obligation.Legal responsibility (disambiguation)Media responsibility.Moral responsibility, or personal responsibility.More items….

What are the advantages of responsibility?

The following points highlight the top five advantages of responsibility accounting, i.e, (1) Assigning of Responsibility, (2) Improves Performance, (3) Helpful in Cost Planning, (4) Delegation and Control, and (5) Helpful in Decision-Making.

What are the various characters of responsibility?

Solved Example on Concept of ResponsibilityAn individual is responsible for the activity or the decision.He shall approve the activity or decision.The management shall consult him before completing the activity or making the decision.The management needs to inform an individual about the activity or the decision.

What is a responsibility Center in accounting?

A responsibility center is an organizational unit headed by a manager, who is responsible for its activities and results. In responsibility accounting, revenues and cost information are collected and reported on by responsibility centers.

What is responsibility accounting and what is its purpose?

Responsibility accounting involves the internal accounting and budgeting for each responsibility center within a company. The objective of responsibility accounting is to assist in the planning and control of a company’s responsibility centers.

What are the advantages and disadvantages of responsibility accounting?

Responsibility Accounting helps management with the cost and budgetary control….DisadvantagesOften it gets difficult to meet the prerequisites of the successful responsibility accounting system. … Since the system requires the presence of highly skillful managers, it raises the cost for the company.More items…•

What are the concepts of responsibility?

“Responsibility is the obligation of an individual to carry out assigned activities to the best of his or her ability”. It is “the obligation to carry out duties and achieve goals related to a position.” The responsibility ends when the person has accomplished the assigned task.

What is responsibility accounting explain with a suitable example?

For example, the cost of rent can be assigned to the person who negotiates and signs the lease, while the cost of an employee’s salary is the responsibility of that person’s direct manager. … Similarly, scrap costs incurred at a machine are the responsibility of the shift manager.

What are the objectives of responsibility accounting?

The objective of responsibilities accounting is to accumulate costs and revenues for each individual responsibility centers so that the deviation from a performance target (typically the budget) can be attributed to the individual who is accumulated for the responsibility center.”

What are the objectives of social responsibility accounting?

Social Accounting / Social responsibility accounting aims to measure and inform the general public about the social welfare activities undertaken by an organization and its impact on the society.

Which is not applicable to responsibility accounting?

Answer: (b) Accounting centre is not applicable to responsibility accounting.

Why should companies implement responsibility accounting?

A business that implements responsibility accounting develops clear expectations for its employees, can provide new insights into profitability, and prepares itself for growth.

What are the four types of responsibility centers?

A responsibility center may be one of four types, which are:Revenue center. This group is solely responsible for generating sales. … Cost center. This group is solely responsible for the incurrence of certain costs. … Profit center. … Investment center.

Which is a responsibility center?

A responsibility center is a part or subunit of a company in which the manager has some degree of authority and responsibility. The company’s detailed organization chart is a logical source for identifying responsibility centers. The most common responsibility centers are the numerous departments within a company.

What are the types of responsibility centers?

Responsibility centers are segments within a responsibility accounting structure. Five types of responsibility centers include cost centers, discretionary cost centers, revenue centers, profit centers, and investment centers. Cost centers are responsibility centers that focus only on expenses.

What are the principles of responsibility accounting?

Thus, responsibility accounting is based on the basic principle that an executive will be held responsible only for those acts over which he has control. Responsibility accounting follows the basic principles of any system of cost control like budgetary control and standard costing.

What are the steps involved in responsibility accounting?

Steps of Responsibility Accounting Track the actual performance of each responsibility center. Compare actual performance with a Target performance. The variance between actual performance and target performance is analyzed. After variance analysis, responsibility of each center should be fixed.

What is the main advantage of Responsibility Accounting?

Advantages of Responsibility Accounting: It creates a sense of efficiency within individual employees as their work and achievements will be reviewed. It guides the management to plan and structure the future expenditure and revenue of a company. Being a cost control tool, it creates ‘cost consciousness’ among workers.