Theory question 103
Departmental Accounts3. (a) State the purpose of departmental accounts (b) State a basis of apportioning each of the following expenses to departments: (i) rent; (ii) salesmen commission; (iii) supervisors' salary; (iv) carriage inwards. (c) List four accounts prepared by a head office to control branch transactions.
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(a) To find the gross and net profit of each department so that results can be compared, weak departments identified, managers rewarded and policies (pricing, expansion, closure) decided.
(b)(i) Rent – floor area; (ii) salesmen commission – sales of each department; (iii) supervisors' salary – number of employees (or time spent); (iv) carriage inwards – purchases.
(c) Any four: branch stock account; branch debtors account; goods sent to branch account; branch stock adjustment account; branch expenses account; branch profit and loss account; branch cash account.
Match each expense to the factor that causes it.