Today’s business is too much competitive than ever before and constantly upgrading with new technologies along with changing business environment and market flexibility. Business failure is a common factor if proper functioning and co-ordination not possible among the organizational subunits or responsibility centers where the individual managers are directly hold responsible for their actions. Attaining organizational goals largely depend upon proper functioning across the organization which can be easily controlled by delegating authorities and responsibilities based on the size and structure of organizations. Responsibility accounting helps not only in evaluating performance but also in taking managerial decisions like cost control and profit planning. Ethical dilemmas can be removed from business operations at all level if responsibility accounting is properly practiced. This study focuses on the reviews of the previous literatures relating to responsibility accounting. A descriptive approach is used to review different literatures to understand the impact of responsibility accounting in business organizations.