Responsibilities of Accounting

Responsibility accounting is an underlying concept of accounting performance measurement systems. The basic idea is that large diversified organizations are difficult, if not impossible to manage as a single segment, thus they must be decentralized or separated into manageable parts. These parts or segments are referred to as responsibility centers that include: 1) cost centers, 2) profit centers and 3) investment centers.
Responsibility Centers; the part of an organization under the control of a manager; has control over revenue, cost, and investment funds;
~~~~~Cost Centers:   a segment that generates costs, but no revenue; contributes to revenue indirectly of fulfills some other corporate mandate. Example: usually production or service departments such as maintenance and engineering, research and development departments, marketing departments, help desks and customer service. Responsibilities: producing a stated quantity and or quality of output at the lowest feasible cost and are free to acquire short-term assets, to hire temporary or contract personnel and manage inventories. Accountable:   managers have the authority to incur costs, ability to control costs. ++ For a cost center, the target will be a unit-cost standard, usually called a standard cost.
~~~~~Profit Centers; a segment that generates both revenue and costs; performance is evaluated on the basis of the return earned on invested capital. Example; units such as human resources and purchasing are strictly cost centers; manufacturing, trucking, fast food Responsible: responsible for both revenues and costs. Managers are evaluated in terms of both the revenues their centers earn and the costs they incur. Allowed to make long term hires, set salary and promotion schedules, organize their units, and acquire long lived assets costing less than some specified amount. Accountable:   both revenues and expenses and profits. The manager has to delegate sales revenue generating activities that...