Chapter_9 - Responsibility Accounting An accounting system...

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An accounting system that provides information . . . Responsibility Accounting Relating to the responsibilities of individual managers. To evaluate managers on controllable items.
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Decision Making is Pushed Down S u p e r v i s o r S u p e r v i s o r M i d d l e M a n a g e m e n t S u p e r v i s o r S u p e r v i s o r M i d d l e M a n a g e m e n t T o p M a n a g e m e n t Decentralization often occurs as organizations continue to grow. Decentralization
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Decentralization Promotes better decision making. Allows upper-level management to concentrate on strategic decisions. Improves productivity. Develops lower-level managers. Improves performance evaluation. Advantages
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Responsibility Reports Prepare budgets for each responsibility center. Prepare timely performance reports comparing actual amounts with budgeted amounts. Measure performance of each responsibility center.
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The Controllability Concept Successful implementation of responsibility accounting depends on clear lines of authority and clearly defined levels of responsibility. V i c e P r e s i d e n t o f F i n a n c e D e p a r t m e n t M a n a g e r S t o r e M a n a g e r V i c e P r e s i d
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