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Purpose / Reasons of Preparing Departmental Accounts:: Less: Sales Returns/ Returns Inwards

The document discusses: 1) The purposes of preparing departmental accounts which are to compare trading results between departments, control unprofitable departments, and aid in decision making such as whether to close or continue a department. 2) Key aspects of departmental accounts including the transfer of goods between departments and allocation of expenses between departments after adjusting for accrued and prepaid items. 3) A sample format for a departmental income statement showing sales, cost of goods sold, gross profit, expenses and net profit/loss for two departments and total.

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Tan Shu Yuin
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2K views1 page

Purpose / Reasons of Preparing Departmental Accounts:: Less: Sales Returns/ Returns Inwards

The document discusses: 1) The purposes of preparing departmental accounts which are to compare trading results between departments, control unprofitable departments, and aid in decision making such as whether to close or continue a department. 2) Key aspects of departmental accounts including the transfer of goods between departments and allocation of expenses between departments after adjusting for accrued and prepaid items. 3) A sample format for a departmental income statement showing sales, cost of goods sold, gross profit, expenses and net profit/loss for two departments and total.

Uploaded by

Tan Shu Yuin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Purpose / Reasons for Preparing Departmental Accounts: Explains the objectives behind preparing departmental accounts, including comparison, performance evaluation, and management decision-making.
  • Income Statement for the Year Ended 31 December 2014: Presents the income statement of Company XYZ broken down by department, providing detailed financial insights.

Purpose / Reasons of preparing Departmental Accounts:

 Comparing trading results of each department (贡献：Manager rewards)


 Need to control unprofitable department
 Decision making (close off or continue)

本章特点：
 Inter transfer of goods
 Allocation of expenses between department (先调整 Accrued/ Prepaid，再按比例平分)

Format:

Company XYZ
Income Statement for the year ended 31 December 2014
Departmental A Departmental B Total
RM RM RM RM RM RM
Sales × × ×
Less: Sales Returns/ Returns Inwards × × ×
Net Sales ×× ×× ××

Less: Cost of Goods Sold


Opening Stock × × ×
Purchases × × ×
Less: Returns Outwards x x x
xx xx xx
Add: Carriage Inwards （相关费用） x x x
xx xx xx
Inter Transfer of Goods × × ×
× × ×
Less: Closing Stock × × ×
× × ×
Gross profit (Gross Loss) ×× ×× ××

Add: Income
Discount Received × × ×
×× ×× ××
Less: Expenses
Rent and Rates / Water and Electricity × × ×
Light and Power × × ×
Insurance × × ×
Depreciation of building × × ×
Repairs and maintenance of building × × ×
Wages and Salaries × × ×
Sales Commission × × ×
Delivery Expenses × × ×
Advertising × × ×
Administrative Expenses × × ×
General Expenses × × ×
x x ×
Net Profit / (Net Loss) xx xx ××

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