DEPARTMENT AND BRANCH ACCOUNTING 11.5.21

The purpose of preparing a departmental profit and loss account for a firm is . . .

• to show the relative financial performance of different sections of the firm.

• to estimate the firm's.future cash requirements.

• to ensure that all likely bad debts are provided for.

• to ensure that discounts allowed by the firm do not exceed discounts received by it.

When preparing a departmental trading and profit and loss account, the best method of allocating expenses between departments is . . .

• to allocate expenses to each department in proportion to the sales of that department.

• to charge against each department those costs which are within its control.

• to allocate expenses to each department in proportion to the purchases of that department.

• None of the above.

Expenses which cannot be apportioned to department must be shown in the __________

• Balance Sheet

• Trading a/c

• Profit and Loss a/c

• Profit and loss appropriation a/c

Rent and rates paid are apportioned among the departments on the basis of

• Sales

• Space occupied

• Purchase

• Number of employees

The balance in the 'goods sent to branch ' account is transferred to

• Branch account

• Head office account

• Profit and loss account

• Trading or purchase account

In case of shortage,under stock and debtors system the profit element is debited to

• Branch stock a/c

• Branch Debtors a/c

• Branch expenses a/c

• Branch adjustments a/c

The objective of branch accounting is to know

• Profit and loss

• Profit and loss of each department

• Profit and loss of head office

• Profit and loss of manufacturing companies

The fixed asset account of a dependent branch is maintained by

• Branch

• Head office

• Both head and branch office

• Departmental store

Under the debtors system in branch a/c ,credit sales are

• Debited to branch a/c

• Credited to branch a/c

• Debited to debtors a/c

• Credited to debtors a/c

In case of shortage,under stock and debtors system the profit element is debited to

• Branch stock a/c

• Branch Debtors a/c

• Branch expenses a/c

• Branch adjustments a/c