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JAMB Principles of Accounts 1997 Question 48

Question 48

Departmental Accounts

Which of the following are advantages of departmental accounts?
I. The department making the highest profit can be easily determined
II. The capital of the business can be calculated easily
III. Easy knowledge of the sources of funding
IV. Encouragement of healthy rivalry among the various departments.

  1. A.I and IV only
  2. B.II and III only
  3. C.II and IV only
  4. D.III and IV only.
Show the answer and explanation

Answer: A (I and IV only)

Explanation

Departmental accounts show each department's results, so the most profitable department is seen and departments compete.