Which of the following is not true regarding a responsibility accounting system?
ID: 2466682 • Letter: W
Question
Which of the following is not true regarding a responsibility accounting system?
A.
It is designed to measure the performance of managers in terms of controllable costs.
B.
It assigns responsibility for costs to the appropriate managerial level that controls those costs.
C.
It should not hold a manager responsible for costs over which the manager has no influence.
D.
It can be applied at any level of the organization.
E.
It is only relevant in manufacturing companies.
2.
An accounting system that accumulates and reports costs incurred by each service department for management to evaluate the performance of a department is a:
Departmental accounting system.
Cost accounting system.
Service accounting system.
Revenue accounting system.
Standard accounting system.
A.Departmental accounting system.
B.Cost accounting system.
C.Service accounting system.
D.Revenue accounting system.
E.Standard accounting system.
Explanation / Answer
1) Statement which is not true:
E) It is only relevant in manufacturing companies.
Responsibility accounting system can be applied to Service and other industry as well.
2) An accounting system that accumulates and reports costs incurred by each service department for management to evaluate the performance of a department is a:
A) Departmental Accounting System
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