Which of the Following Is True of Responsibility Accounting

question 65

Multiple Choice

Which of the following is true of responsibility accounting?

• A) It is a system that measures the plans, budgets, actions, and actual results of a responsibility center.
• B) It is an arrangement of lines of responsibility and authority within a responsibility center.
• C) It explicitly incorporates continuous improvement and changes due to learning curve.
• D) It examines how a result will change if the original plan is not achieved.

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Definitions:

Step-fixed Costs

Expenses that remain constant for a set level of production or output, but can change when a certain threshold is crossed.

Inflationary Price Increase

The rise in prices of goods and services over time, typically due to an increase in the money supply or demand outpacing supply.

Reconciled

The process of making sure that two sets of records (usually the balances of two accounts) are in agreement.

Step-fixed Costs

Costs that remain fixed over a range of activity, but jump to a higher level of expense at certain points when activity levels require it.