Theory question 102
Departmental Accounts2. "In departmental accounts, items of expenses are allocated using some basis of apportionment". List five items of expenses related to a departmental account and a base of apportioning each item.
Show the model answer
Model answer
Any five: rent and rates – floor area; lighting/air-conditioning – floor area or meter; power – horse power or meter; depreciation – value of fixed assets in each department; insurance of stock – value of stock; insurance of premises – floor area; carriage inwards and discount received – purchases; carriage outwards, advertising and discount allowed – sales; salaries, canteen and welfare costs – number of employees; supervision – labour hours or number of employees.
Explanation
Choose a basis that reflects how much each department uses the service.