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Advantages of Responsibility Accounting

The ultimate aim of the responsibility accounting is to help and guide the management to achieving organisational goals. The following are some important advantages of responsibility accounting.


(i)                 It provides a system of closer control.

(ii)               It defines and communicates the corporate objectives and individual goals in an

efficient manner.

(iii)             It helps to improve the quality of decision making.

(iv)             Each and every employee knows what is expected of him. And at the same time

no one can escape from anything that goes wrong.

(v)               It measures the performance of individual employee in an objective manner.

(vi)             It fosters a sense of cost-consciousness among managers and their subordinates.

(vii)           It acts as a suitable tool of cost control.

(viii)         It is helpful in planning for future costs and revenues.

(ix)             It guides the management to make an effective delegation of authority and      responsibility.

(x)               If necessary, corrective action can be taken and efficient control over  the cost can be   obtained.