Departmental Accounts - Principles of Accounting

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Departmental Accounts

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

Use of Departmental Accounts:

If trading A/c is prepared by adding all departments figures of purchases, sales etc, we wont be able toknow 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

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

If one department is running in loss, it can be closed so that we can avoid loss and make a greatGross profit.Or it can be replaced with some other business which is profitable.

Easy Trading Strategies

First Rule: Don't Lose MoneySecond: Sell These 3 Stocks Now

WealthDaily.com/Trading_Stock

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Most of the times, departmental trading account will appear as follows as few items of trading A/c aregiven, Suppose opening stock, Purchases, sales and closing stock,

S.Deens super store

Trading A/c for the year ended

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 Furniture

Sales 5000 4000

Purchases 3000 2500

Stock (1.1.2005) 1200 1600

Stock(31.12.2005) 800 700

Return Inward 300 200

Return Outward 450 350

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: 01.04.2005 31 03.2006.

Clothing Department 16300 15700

Sports Goods Department 7500 6100

Electrical Department 12400 9600

Sales for the year:

Clothing Department 40900

Sports Goods Department 22500

Electrical Department 30200


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Purchase for the year:

Clothing Department 33450

Sports Goods Department 11275

Electrical Department 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

( $) ( $)

Carpet Department 16,100 18,410

White Goods Department 37,916 35,119

Music Department 31,222 40,216

Sales of the year: ( $)

Carpet Department 62,400

White Goods Department 151,300

Music Department 94,820

Purchase for the year:

Carpet Department 43,600

White Goods Department 118,260

Music Department 55,924

Incoming search terms:

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Departmental Accounts - Principles of Accounting