RESPONSIBILITY ACCOUNTING SYSTEMS

This paper presents the basic structure of cost accounts of a Responsibility Accounting System (RAS) that can be integrated with the overall financial accounts of an organization. We determined the popular Anthony model of integrated financial accounts is deficient in RAS specifications. His “production” segment contains only the work‐inprocess. Now we place in the production segment an internal accounting structure that explicitly identifies the cost elements, the operating costs of responsibility centers, the cost of functional production activities, and the cost of goods sold. Students can use this structure as a conceptual framework in their analysis and design of internal, management accounting system.