Posted in Finance, Accounting and Economics Terms, Total Reads: 1133
Definition: Responsibility Accounting
For organizations with voluminous operating activities, it is not possible to maintain the same amount of controllability in all the departments. Thus, the responsibilities are decentralized into separate parts which can be effectively managed such that the firm attains its goals. The separate parts are known as responsibility centers that can be revenue centers, cost centers, investment centers and profit centers.