Responsibility accounting: It is the ethical responsibility of an accountant that he has to those who rely on his work. The persons are made responsible for the control of cost. Responsibility creates cost center, profit center, and revenue center. In the decentralized environment, it is required for persons taking decisions should be held responsible for the same. And, the performance of every area should be monitored. The example of a company whose responsibility centers would likely be created on basis of functional area, product line, and geographic area.

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Chapter 10, Problem 3ME

To determine

Concept introduction:

Responsibility accounting:

It is the ethical responsibility of an accountant that he has to those who rely on his work. The persons are made responsible for the control of cost. Responsibility creates cost center, profit center, and revenue center. In the decentralized environment, it is required for persons taking decisions should be held responsible for the same. And, the performance of every area should be monitored.

The example of a company whose responsibility centers would likely be created on basis of functional area, product line, and geographic area.

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