Definition: A responsibility accounting system is an accounting program that gathers and provides information for management to evaluate how well department managers are performing. In other words, it’s a system that is used to gauge how well departments are managing expenses and controlling costs.
What is the example of responsibility accounting?
For example, the cost of rent can be assigned to the person who negotiates and signs the lease, while the cost of an employee’s salary is the responsibility of that person’s direct manager.
