Question 5 OR (b)

Departmental accounting; branch and departmental accounting

6 marks

Time to write: About 12 minutes
Topic: Departmental accounts
Notes: Crux notes

Question

Question 5 OR (b) · 6 marks

What is Departmental Accounting? Also differentiate between Branch Accounting and Departmental Accounting. (12+6=18)

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

What…?Differentiate…2 asks, each with its own marks below. Answer both.
differentiate betweenSet the differences out in a table, basis by basis, not as two separate essays.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Meaning, objectives and methods of departmental accounting 3 marks 5 min
2 Differences between branch and departmental accounting 3 marks 5 min
Check: every ask answered, key terms underlined 1 min

Easy marks

Step 1 opens with the meaning: a one-line definition, the quickest mark in it.

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Departmental accounting. A department is a section of a business under one roof, such as a department of a large store. Departmental accounting keeps the accounts of each department so that the progress of the business and of each department can be seen. Its objectives are to find each department's result and compare them, to decide whether to expand or drop a department, and to plan. It is done either with separate books for each department, suited to large organisations, or with joint (columnar) accounts, suited to small ones.

Picture itDepartmental accounting; branch and departmental accounting

1One roof, one meter, many counters—clothes, toys, utensils share the bills under one roof.

Departmental accountingAll departments are at one place, under one roof; common expenses are apportioned between departments on a suitable basis.

2Shops scattered across the map—hill, town, seaside—each paying its own way.

Branch accountingBranches are at different places; each branch bears its own expenses.

Branch and departmental accounting.

#	Basis	Departmental accounting	Branch accounting
1	Location	All departments at one place	Branches at different places
2	Maintenance of accounts	Kept centrally by the head office	An independent branch keeps its own accounts
3	Allocation of expenses	Common expenses allocated on a suitable basis	No allocation needed
4	Reconciliation	Not needed	An independent branch's accounts must be reconciled with the head office's

These follow the DU text's comparison of the two.

Where the 6 marks sit

#	Component	Marks
1	Meaning, objectives and methods of departmental accounting	3
2	Differences between branch and departmental accounting	3
	Total	6

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