Discuss the principles of allocation of indirect expenses in departmental accounts. Also
discuss the basis on which apportionment of joint expenses is made in departmental
accounts.
Answers
Answer:
Explanation:
Considering that there are two types of expenses in departmental accounts, Direct and Indirect, their treatment varies.
For instance,
Generally, all direct expenses are charged to the departments together. Like its one unit.
The indirect ones need proper allocation among the department. For example, the principles state that they should ascertain the profit and loss made by each department.
For example,
Indirect expenses in departmental accounts include,
1-Expenses on purchases, carriage, duty, etc. This is the expense of one department, i.e make allocation of ratio of departmental net purchases but, ignore the inter-departmental purchases.
Answer:
Explanation: this insurance is allocated in the ratio of wages of each department