What do you mean by Responsibility Accounting? Definitions & Meaning

Meaning of Responsibility accounting

Responsibility Accounting is a system of control under which a proper authority is given to the person to control the cost of goods and services, which means the person is made responsible for the control of cost So In Case performance is not according to standards then that person is responsible for it.

For Example, Mr. Rahul is a manger of the department and in Responsibility accounting, Mr. Rahul's duty to maintain cost under control and according to standards and should analyze costs properly find out reasons behind Over-Cost of goods and services made in his department.

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Definition of Responsibility Accounting 

Definition of Responsibility accounting given by the Institute of Cost and Works Accountants of India

Responsibility Accounting is “a System of management accounting under which accountability established according to the responsibility delegated to various level of management and management information and reporting system instituted to given adequate feedback in terms of the delegated responsibility under this system division or units of an organization under a specified authority in a person are developed as responsibility centers and evaluated individually for the performance”  - Institute of Cost and Works Accountants of India

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