What Is a Responsibility Center?

The responsibility center is the accounting unit for responsibility accounting. That is, the internal (responsible) units that bear certain economic responsibilities and enjoy certain rights are the starting point and basis for implementing responsibility accounting, including cost centers, profit centers, and investment centers. The responsibility center has clear decision-making authority and evaluates performance accordingly. ^[1]

Responsibility Center

Right!

The responsibility center is the accounting unit for responsibility accounting. That is, the internal (responsible) units that bear certain economic responsibilities and enjoy certain rights are the starting point and basis for implementing responsibility accounting, including cost centers, profit centers, and investment centers. The responsibility center has clear decision-making authority and evaluates performance accordingly. ^[1]

Responsibility center refers to an internal (responsible) unit of an enterprise that bears certain economic responsibilities and enjoys certain rights. The responsibility center is

The correct authorization should be that the superior gives the subordinate the authority to do things, and the corresponding superior department should also get the responsibility feedback from the subordinate, rather than hand over the responsibility.

The responsibility center is to make each unit have the responsibility and right within its specified scope of responsibility, and work actively to ensure the realization of the goals of the center.

The responsibility center can be divided into

1. It has a relatively independent status in certain business activities of the enterprise and can independently assume certain economic responsibilities.

2. Have the right to manage business activities within the scope of certain management and control responsibilities.

3, can set clear goals, and have the ability to achieve goals.

4. In the business activities, can independently perform and complete the tasks specified by the goals.

Purpose of setting up a responsibility center

It is to make each unit have the responsibility and right within its specified scope of responsibility, and work actively to ensure the realization of the goals of each center.