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• Responsibility Accounting System
A responsibility accounting system uses the concept of controllable costs to assign managers the responsibility for costs and expenses under their control. Prior to each reporting period Kerryon Johnson Womens Jersey , a company prepares plans that identify costs and expenses under each manager’s control. These plans are called responsibility accounting budgets. To ensure the cooperation of managers and the reasonableness of budgets, managers should be involved in preparing their budgets. A responsibility accounting system also involves performance reports. A responsibility accounting performance report accumulates and reports costs and expenses that a manager is responsible for and their budgeted amounts. Management’s analysis of differences between budgeted amounts and actual costs and expenses often results in corrective or strategic managerial actions. Upper-level management uses performance reports to evaluate the effectiveness of lower-level managers in controlling costs and expenses and keeping them within budgeted amounts. A responsibility accounting system recognizes that control over costs and expenses belong to several levels of management.
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