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What is Responsibility Accounting? Does it work?

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What is Responsibility Accounting? Is it used in your current or former place of employment, and if not would it work? Why or why not?

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Solution Summary

Your tutorial is 312 words and discusses cost centers, revenue centers, profits centers and investment centers and how they have worked in the past along with downsides of each.

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Responsibility accounting is a practice of decentralizing an organization and having managers take responsibility for a portion of the business results. The responsibility is usually tied to rewards and promotion or evaluation and so the manager works hard to try to manage the segment that is his/her responsibility to maximize the results. There for four basic ways to do this. You assign responsibility for the (1) costs, (2) the revenues, (3) the profits or the (4) return on investment. ...

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Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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