Departmental Accounts - Principles Of Accounting

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Departmental Trading Account It is also known as columnar Trading Account. Departmental Store: It is a large retail organization It has number of departments situated under one roof. Each department deals with only one particular types of goods

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Use of Departmental Accounts: If trading A/c is prepared by adding all departments figures of purchases, sales etc, we wont be able to know how much Gross profit (Loss) is made by each department.

If Gross Profit is calculated taking the figures separately, we can see how well or how badly each part of business is doing.

It is very useful for decision making If one department is running in loss, it can be closed so that we can avoid loss and make a great Gross profit. Or it can be replaced with some other business which is profitable.

Format of Departmental Trading Account

This is similar to Vertical format of Trading A/c. E.g.: S.Deens super store has two departments of clothing and Jewelry. S.Deens super store Trading A/c for the year ended

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Most of the times, departmental trading account will appear as follows as few items of trading A/c are given, Suppose opening stock, Purchases, sales and closing stock, S.Deens super store Trading A/c for the year ended

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Departmental Account Questions: Q1.You are to draw up the Trading Account for S.Hasmaths Departmental Store from the following information for the year ended 31 December 2005. Departments Electronic Sales Purchases Stock (1.1.2005) Stock(31.12.2005) Return Inward Return Outward Furniture 5000 3000 1200 800 300 450 4000 2500 1600 700 200 350

Q2.From the following information, you are to draw up the Trading Account for S.Vaseems Departmental Store for the year ended 31march 2006.

Stock: Clothing Department Sports Goods Department Electrical Department Sales for the year:

01.04.2005 16300 7500 12400

31 03.2006. 15700 6100 9600

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Clothing Department 40900 Sports Goods Department Electrical Department 22500 30200

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Departmental Accounts - Principles Of Accounting

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Purchase for the year: Clothing Department Sports Goods Department Electrical Department 33450 11275 16750

Question 03. From the following you are to draw up the trading account for John Keelss Department Store for the year ended 30 June 206. Stocks: 1.7.2005 30.6.2006

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( $) ( $) Carpet Department White Goods Department Music Department Sales of the year: Carpet Department White Goods Department Music Department Purchase for the year: Carpet Department White Goods Department Music Department 43,600 118,260 55,924 16,100 37,916 31,222 ( $) 62,400 151,300 94,820 18,410 35,119 40,216

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