responsibility accounting

Responsibility accounting is a managerial accounting system that assigns specific financial responsibilities to different parts of an organization, such as departments or managers. Each segment is accountable for its revenues and expenses, promoting accountability and performance measurement. By evaluating how well each unit manages its finances, organizations can identify strengths and weaknesses, leading to better decision-making and efficiency. Essentially, it helps businesses track who is responsible for financial results, ensuring that managers have the authority to make decisions that align with their budgetary responsibilities.