Which of the Following Statements About Responsibility Accounting Is True

question 164

Multiple Choice

Which of the following statements about responsibility accounting is true?

• A) Managers should be held responsible for all price variances that occur within their department.
• B) Managers should be held responsible for all revenues and costs that occur within their department.
• C) Managers should be responsible for all investment decisions that occur within their department.
• D) Managers should be held responsible for only those things under their control.

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Definitions:

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, placing a heavier burden on wealthier taxpayers.

Proportional Tax

A taxation system where the tax rate remains constant regardless of the amount subject to tax.

Lump-Sum Tax

A tax of a fixed amount that does not vary with the taxpayer's income or activities.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating how much of any additional income will be taken in taxes.