In a Responsibility Accounting System

question 152

Multiple Choice

In a responsibility accounting system:

• A) Controllable costs are assigned to managers who are responsible for them.
• B) Each accounting report contains all items allocated to a responsibility center.
• C) Organized and clear lines of authority and responsibility are only incidental.
• D) All managers at a given level have equal authority and responsibility.
• E) Control over costs belongs only to the top level of management.

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Definitions:

Lobster Boats

Small, specialized boats designed for the purpose of lobster fishing, often equipped with traps and storage areas for the catch.

Revenue

The sum of money a business earns from selling goods or offering services over a specified period.

Operating Cost

The expenses associated with the day-to-day running of a business, such as rent, utilities, and payroll, excluding capital expenditures.

Monthly

Relating to or occurring once a month; often used to describe payments, subscriptions, or reporting periods that happen once per month.