Which of the following are the benefits of responsibility accounting? 1. It facilitates the centralisation of decision taking. 2. It provides a system of closer control. 3. It measures the performance of individuals in an objective manner. 4. It develops a sense of cost consciousness among managers and their subordinates.

Answer: Option B

Responsibility accounting is a system where different managers are made responsible for the performance of their own departments, especially in terms of costs and revenues.

Statement 1 is incorrect because responsibility accounting encourages decentralisation of decision-making, where managers at different levels are given authority to take decisions for their own areas, rather than centralising all decisions at the top.

Statement 2 is correct as it provides a system of closer control, since each manager is accountable for their department’s performance, making monitoring more effective.

Statement 3 is correct because it enables objective measurement of individual performance by comparing actual results with predetermined targets or budgets.

Statement 4 is also correct as it develops a sense of cost consciousness among managers and their subordinates, encouraging efficient use of resources.

Therefore, the correct statements are 2, 3 and 4.

Hence, Option B is correct.