Q6RQ - Horngren'S Financial And Managerial Accounting

Question

Question: What is the purpose of a responsibility accounting system?

Step-by-Step Solution

Answer

Answer

The major purpose of a responsibility accounting system is to fix the cost control.

Step 1: Meaning of Responsibility Accounting

The responsibility accounting system is used in the managerial accounting branch in which each unit or manager is held responsible and accountable for their assigned and performed tasks.

Step 2: Purpose of responsibility accounting system

Business entities exercise the responsibility accounting system to delegate the responsibilities associated with the revenues and costs. The major purpose of a responsibility accounting system is to apply cost control techniques for generating more revenues.