Which of the Following Is True of Responsibility Accounting

question 21

Multiple Choice

Which of the following is true of responsibility accounting?

• A) It suggests that foreign subsidiaries should be held responsible for profitability of the parent companies.
• B) Responsibility accounting suggests that local manager should be held responsible for the translation adjustment.
• C) It suggests that costs, revenues, assets, and liabilities should be traced to the individual manager who is responsible for them.
• D) It suggests that managers should be held accountable for items that are both controllable and uncontrollable.

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Definitions:

IRS

The Internal Revenue Service, the U.S. federal agency responsible for administering and enforcing the tax laws and collecting federal taxes.

Tax Return

A form or forms filed with a government body reporting income, expenses, and other pertinent tax information, used to calculate tax liability.

Financial Statements

Formal records of the financial activities and condition of a business, person, or other entity, typically including a balance sheet, income statement, and cash flow statement.

Plant Assets

Long-term tangible assets used in the operation of a business and not expected to be consumed or converted into cash in the short term.