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JAMB Principles of Accounts 2008 Question 33

Question 33

Departmental Accounts

The main reason for adopting a departmental account is to

  1. A.record transactions for each department for better documentation
  2. B.tackle any recording problem as a result of expansion
  3. C.continuously evaluate the profitability of different departments
  4. D.ensure that departmental managers are adequately monitored.
Show the answer and explanation

Answer: C (continuously evaluate the profitability of different departments)

Explanation

Departmental accounts show the profit of each department so that their performance can be compared.