<–2/”>a >RESPONSIBILITY ACCOUNTING
Responsibility accounting is a management control system based on the principles of delegating and locating responsibility. The authority is delegated on responsibility centre and accounting for the responsibility centre. Responsibility accounting is a system under which managers are given decisions making authority and responsibility for each activity occurring within a specific area of the company. Under this system, managers are made responsible for the activities of segments. These segments may be called departments, branches or divisions etc., one of the uses of management accounting is managerial control.
Responsibility accounting is a system of dividing an organization into similar units, each of which is to be assigned particular responsibilities. These units may be in the form of divisions, segments, departments, branches, product lines and so on. Each department is comprised of individuals who are responsible for particular tasks or managerial functions. The managers of various departments should ensure that the people in their department are doing well to achieve the goal. Responsibility accounting refers to the various concepts and tools used by managerial accountants to measure the performance of people and departments in order to ensure that the achievement of the goals set by the top management. Responsibility accounting, therefore, represents a method of measuring the performances of various divisions of an organization.
For example, if Mr. A, the manager of a department, prepares the cost budget of his department, then he will be made responsible for keeping the budgets under control. A will be supplied with full information of costs incurred by his department. In case the costs are more than the budgeted costs, then A will try to find out reasons and take necessary corrective measures. A will be personally responsible for the performance of his department.
Responsibility accounting usually involves the preparation of annual and monthly budgets for each responsibility center. Then the company’s actual transactions are classified by responsibility center and a monthly report is prepared. The reports will present the actual amounts for each budget line item and the Variance between the budget and actual amounts.
Responsibility accounting allows the company and each manager of a responsibility center to receive monthly feedback on the manager’s performance. Principles of Responsibility Accounting: The following principles of Responsibility Accounting are taken into consideration in order to: (i) Fix up the target on budgets or standards or estimates according to responsibility; (ii) Evaluate the performances, i.e., to compare the actual results with the budgets for ascertaining the variances; (iii) Analyse the variances for fixing responsibility on the responsibility centres and make reports to the top management. (iv) Take corrective actions and communicate these to the persons concerned.
Social accounting can be defined as a set of organisational activities that deals with the measurement and analysis of the social performance of organisations and the reporting of results to concerned groups, both within and outside the organisation.
Social accounting, also known as NATIONAL INCOME accounting, is a method to present statistically the inter-relationships between the different sectors of the economy for a thorough understanding of the economic conditions of the economy.
Components of Social Accounting: The principal forms of economic activity are production, consumption, capital accumulation, government transactions and transactions with the rest of the world. These are the components of social accounting. If the incomings and outgoings of a country relating to these five activities are shown in the form of accounts, they show a closed Network of flows representing the basic structure of the economy. These flows are always expressed in Money terms. 1) Production Account: The production account relates to the business sector of the economy. It includes all forms of productive activity, i.e., manufacturing, trading, etc. It covers public and private companies, proprietary firms and partnerships, and state-owned business undertakings. 2) Consumption Account: The consumption account refers to the income and expenditure account of the household or personal sector. The household sector includes all consumers and non-profit making institutions such as clubs and associations.
3) Government Account: The government account relates to the outflows and inflows of the government sector. In the government sector are included all public authorities—centre, states and local authorities in a country (4) Capital Account: The capital account shows that saving equals domestic and foreign Investment. Saving is invested in fixed capital and inventories within the country and/or in international assets. 5) Foreign Account: Foreign account shows the transactions of the country with the rest of the world. This account covers international movements of goods and Services and Transfer Payments and corresponds to the Current Account of the international Balance of Payments.,
Responsibility and social accounting are two important concepts that are often discussed in the business world. Accountability refers to the responsibility that businesses have to their stakeholders, including shareholders, employees, customers, and the community. Social accounting refers to the process of measuring and reporting on a company’s social and environmental performance.
There are many reasons why businesses should be accountable and socially responsible. First, it is the right thing to do. Businesses have a responsibility to use their Resources in a way that benefits Society as a whole. Second, being accountable and socially responsible can help businesses attract and retain customers and employees. Third, it can help businesses reduce costs and improve efficiency. Fourth, it can help businesses build a positive reputation and brand image.
There are many ways that businesses can be accountable and socially responsible. One way is to adopt a Code of ethics. A code of ethics is a set of principles that guide the behavior of employees. It can help businesses make ethical decisions and avoid scandals. Another way to be accountable and socially responsible is to conduct an environmental audit. An environmental audit is a process of assessing a company’s environmental impact. It can help businesses identify areas where they can improve their environmental performance.
Businesses can also be accountable and socially responsible by donating to charity or volunteering their time. This can help businesses give back to the community and make a positive impact on the world. Finally, businesses can be accountable and socially responsible by reporting on their social and environmental performance. This can help businesses be transparent about their impact and hold themselves accountable for their actions.
Accountability and social responsibility are important concepts that can help businesses improve their performance and make a positive impact on the world. By adopting a code of ethics, conducting an environmental audit, donating to charity, volunteering their time, and reporting on their social and environmental performance, businesses can be accountable and socially responsible.
In addition to the above, here are some other things that businesses can do to be more accountable and socially responsible:
- Engage with stakeholders. Businesses should regularly communicate with their stakeholders, including shareholders, employees, customers, and the community. This will help businesses understand the expectations of their stakeholders and make sure that they are meeting those expectations.
- Adopt sustainable practices. Businesses should adopt sustainable practices in their operations. This includes using energy-efficient technologies, reducing waste, and recycling. Sustainable practices can help businesses reduce their environmental impact and save money.
- Support ethical trade. Businesses should support ethical trade practices. This includes ensuring that their suppliers pay their workers a fair wage and provide safe working conditions. Ethical trade can help businesses improve their reputation and brand image.
- Be transparent. Businesses should be transparent about their social and environmental performance. This includes disclosing information about their environmental impact, employee relations, and charitable giving. Transparency can help businesses build trust with their stakeholders.
By taking these steps, businesses can be more accountable and socially responsible. This can help businesses improve their performance, make a positive impact on the world, and build trust with their stakeholders.
What is corporate social responsibility?
Corporate social responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the Environment in all aspects of their operations.
What are the benefits of CSR?
There are many benefits to CSR, including:
- Improved brand reputation: CSR can help to improve a company’s reputation and make it more attractive to customers, employees, and investors.
- Increased sales: CSR can lead to increased sales by making customers more likely to buy from a company that they believe is doing good.
- Reduced costs: CSR can lead to reduced costs by reducing waste and improving efficiency.
- Improved employee morale: CSR can improve employee morale and make employees more likely to stay with the company.
- Increased innovation: CSR can lead to increased innovation by encouraging employees to come up with new ideas that can benefit society.
What are some examples of CSR?
Some examples of CSR include:
- Donating to charity: Companies can donate money or products to Charities that support causes that they believe in.
- Volunteering: Companies can encourage their employees to volunteer their time to help others.
- Investing in the community: Companies can invest in the communities where they operate by supporting local schools, parks, and other Infrastructure-2/”>INFRASTRUCTURE.
- Reducing their environmental impact: Companies can reduce their environmental impact by investing in RENEWABLE ENERGY, recycling, and reducing waste.
- Promoting ethical labor practices: Companies can promote ethical labor practices by ensuring that their suppliers pay their workers a fair wage and provide safe working conditions.
What are some challenges of CSR?
Some challenges of CSR include:
- Measuring the impact of CSR: It can be difficult to measure the impact of CSR activities.
- Managing stakeholder expectations: Companies need to manage the expectations of their stakeholders, such as customers, employees, and investors.
- Avoiding greenwashing: Greenwashing is when a company makes false or misleading claims about its environmental performance.
- Ensuring that CSR is not just a PR stunt: CSR should be an integral part of a company’s strategy, not just a way to improve its public image.
What is the future of CSR?
The future of CSR is likely to be more focused on sustainability and impact. Companies will need to find ways to reduce their environmental impact and make a positive impact on society. CSR will also become more integrated into business strategy, rather than being seen as a separate activity.
Question 1
Which of the following is not a type of accounting?
(A) Financial accounting
(B) Managerial accounting
(C) Social accounting
(D) Responsibility accounting
Answer (C)
Social accounting is not a type of accounting. It is a system of accounting that focuses on the social and environmental impacts of an organization’s activities.
Question 2
The purpose of financial accounting is to:
(A) Provide information to investors and creditors about an organization’s financial position and performance.
(B) Provide information to managers about the costs and revenues of their activities.
(C) Provide information to the public about an organization’s social and environmental impacts.
(D) All of the above.
Answer (A)
Financial accounting is the process of recording, summarizing, and reporting financial information about an organization to external users, such as investors and creditors.
Question 3
The purpose of managerial accounting is to:
(A) Provide information to investors and creditors about an organization’s financial position and performance.
(B) Provide information to managers about the costs and revenues of their activities.
(C) Provide information to the public about an organization’s social and environmental impacts.
(D) All of the above.
Answer (B)
Managerial accounting is the process of recording, summarizing, and reporting financial information about an organization to internal users, such as managers.
Question 4
Which of the following is not a financial statement?
(A) Balance sheet
(B) Income statement
(C) Statement of cash flows
(D) Social responsibility report
Answer (D)
A social responsibility report is not a financial statement. It is a report that provides information about an organization’s social and environmental impacts.
Question 5
The balance sheet shows:
(A) An organization’s assets, liabilities, and Equity at a point in time.
(B) An organization’s revenues, expenses, and net income for a period of time.
(C) The cash flows into and out of an organization for a period of time.
(D) All of the above.
Answer (A)
The balance sheet is a financial statement that shows an organization’s assets, liabilities, and equity at a point in time.
Question 6
The income statement shows:
(A) An organization’s assets, liabilities, and equity at a point in time.
(B) An organization’s revenues, expenses, and net income for a period of time.
(C) The cash flows into and out of an organization for a period of time.
(D) All of the above.
Answer (B)
The income statement is a financial statement that shows an organization’s revenues, expenses, and net income for a period of time.
Question 7
The statement of cash flows shows:
(A) An organization’s assets, liabilities, and equity at a point in time.
(B) An organization’s revenues, expenses, and net income for a period of time.
(C) The cash flows into and out of an organization for a period of time.
(D) All of the above.
Answer (C)
The statement of cash flows is a financial statement that shows the cash flows into and out of an organization for a period of time.