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Managerial Accountancy & Responsibility Centers:

Managerial Accountancy

Managerial Accountancy & Responsibility Centers:

                Managerial Accountancy is a very responsible business in the modern world. Corporate World whole investment is relying upon the managerial accountants. That’s the reason during hiring the professional accountant's companies human resource departments always work hard to access the most professional and experienced personals to appoint over these professional financial goalkeepers posts. Because these are the persons who have the knowledge and expertise to manage the financial accountancy department and works of the business. The Accountants jobs are very responsibility jobs only smart persons can manage these responsibilities.

Introduction:

The business organizations have two kind of decision-making systems one is centralized and the other one is decentralized systems. Those organizations that have a centralized system of responsibilities management their decision are more controlled and more consolidated. The local managers are very clear about decisions and business responsibilities. The SME level organizations are mostly using centralized accountancy systems. The Large business units or organizations which are divided into many subunits and departments they prefer the decentralized managerial accountancy system.

Accounting Systems:
Both systems are used to the business organizations, due to the difference in their business operations and capital management responsibilities they use different managerial accountancy and responsibility management techniques.  Just like in the decentralized accountancy system the activities or operations or revenue and cost or other items are more controllable.

Response Centers:

Managerial Accountants develop some response centers which are known as responsibility management or strategic business units. That’s responsibility centers are we designed as according to the responsibilities. There are many responsibility centers like the cost centers, profit centers, revenue centers, and investment centers. The managerial accountant controls them only on the basis of the responsibility.

Their response centers like costing center are used for costing purpose just like the maintenance department which is used to for maintenance purposes. The Profit center like the sales department which is used for revenue purposes. Revenue centers like the retail store which is used for revenue and expense person. Investment centers are like a branch office and use for revenue, expense, and investment of capital purposes. All these response centers have many advantages and disadvantages but the main purpose of these response centers is to control the information flow and manage the operational activities to motivate all the stakeholders and responsible persons.

That’s the reason we can say that the response centers helps the business stakeholders, managerial accountants in the business goal congruence and sub-optimization of activities and responsibilities.












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