Departmental Accounting facilitates
Answers
Departmental accounts are prepared separately for each department and trial balance will also be prepared. Departmental P&l account is prepared to ascertain the profit or loss of each department separately and at the end of the year it is transferred to General profit and loss account of the whole organisation.
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Complete question:
Departmental Accounting facilitates :
a) Comparison of trading results b) Intelligent planning and control
c) Evaluating departmental performance d) All of the above
Answer:
Correct option is:
d) All of the above
Departmental Accounting facilitates are Comparison of trading results, Intelligent planning and control and Evaluating departmental performance.
Explanation:
A system of financial accounting called department accounting, also known as departmental accounting, is used in businesses whose various departments or departmental stores handle all of the business. Each department's departmental accounts are created separately, and a trial balance is also created. An accounting information system that tracks the department's activities and financial data is known as a departmental accounting system. Managers can determine each department's profitability and efficiency using the financial data from the departmental accounting system.
Departmental Accounting facilitates:
- Making comparisons is useful for understanding the financial situation of each department separately.
- Determine the managers' commissions on a departmental basis.
- Analyze control, planning, and performance.
- Comparison of trading results .
- Intelligent planning and control.
- Evaluating departmental performance.
The following are the primary goals of departmental accounting:
- To view a performance by another department.
- To compare the department's performance to the results from the prior period.
- Each department's gross profit is identifiable.
- Inefficient departments will become apparent.