Departmental Accounting | All basics covered | Part 1 | B.COM/BBA/CA
Rajat Arora UG and Professional Courses・2 minutes read
The course on Departmental Accounting Inventories covers the basics of financial accounting, focusing on managing multiple departments within a business and assessing their performance through separate or joint accounts. The chapter includes creating department trading accounts, allocating expenses based on specific criteria, and distributing general expenses, provisions for stock, and final profit calculations in a detailed and proportional manner.
Insights
- Departmental Accounting involves managing multiple departments within a business, categorizing them as dependent or independent, and utilizing separate or joint accounts for financial assessment.
- The process of Departmental Accounting includes creating department trading accounts similar to regular trading accounts, allocating expenses based on specific criteria, and distributing costs such as power charges and insurance premiums based on factors like floor space and number of machines, ensuring detailed and proportional expense allocation.
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Recent questions
What is Departmental Accounting?
Departmental Accounting involves managing multiple departments within a business to assess their performance.
What are the types of departments in Departmental Accounting?
Two types of departments exist: dependent and independent.
How is Departmental Accounting different from regular accounting?
Departmental Accounting involves managing multiple departments within a business.
What is the purpose of creating a department trading account?
The chapter includes creating a department trading account similar to a trading account.
How are expenses allocated in Departmental Accounting?
Expenses such as power charges, repair maintenance, and insurance premiums are distributed according to specific factors.
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Summary
00:00
Introduction to Departmental Accounting for B.Com Students
- The topic of Departmental Accounting Inventories is being introduced for B.Com students, particularly beneficial for those in Well Aage Tu Foundation.
- Inventory Valuation Style is available on the channel for reading, with the option to post it in the comments if desired.
- The course aims to cover the entire C course in one place, focusing on Financial Accounting basics.
- Departmental Accounting involves managing multiple departments within a business to assess their performance.
- Two types of departments exist: dependent, where one department relies on another, and independent, which operate separately.
- Departmental Accounting can be done by creating separate accounts for each department or by making joint accounts with separate columns.
- The chapter includes creating a department trading account similar to a trading account, with expenses allocated based on specific criteria.
- The format for departmental accounting mirrors that of trading and profit and loss accounts from class 11, with specific sections for expenses and income.
- The process involves recording opening stock, net purchases, direct expenses, sales, closing stock, and calculating gross profit.
- General expenses, provisions for stock, and final profit calculations are included, with a focus on allocating expenses based on specific criteria.
13:53
Cost Allocation Based on Purchases and Factors
- Purchases are crucial in determining the distribution of goods, with commissions related to purchases and sales expenses linked to discounts, sales commissions, and post-sale services, all allocated based on the respective proportions of purchases and sales.
- Expenses such as power charges, repair maintenance, and insurance premiums are distributed according to specific factors like floor space occupied, number of machines in each department, and the workforce, ensuring a detailed and proportional allocation of costs based on relevant criteria.
