Departmental Account - Meaning/Definition - SS3 Accounting Past Questions and Answers - page 1
What is a departmental account?
A type of accounting system that separates the financial information of a business into different departments or segments
A type of accounting system that combines the financial information of a business into a single set of accounts
A type of accounting system that is only used in small businesses
A type of accounting system that is used only by accountants
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Why are departmental accounts commonly used in large businesses?
To identify which departments are profitable and which are not
To avoid paying taxes
To make the accounting process more complex
To make the financial statements more confusing
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What is the purpose of consolidating the accounts of each department into a departmental account?
To make the financial statements easier to understand
To identify the financial performance of each department separately
To make the accounting process more complicated
To reduce the amount of paperwork
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Who typically uses departmental accounts?
Large businesses with multiple departments or product lines
Small businesses with only one department
Individuals for personal accounting purposes
Accountants only
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What is the main advantage of using departmental accounts?
They provide a detailed and comprehensive view of a business's financial performance by breaking it down into smaller, more manageable segments
They make the accounting process more complicated
They reduce the amount of paperwork
They make the financial statements more confusing
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What is the purpose of using departmental accounts in a business?
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What type of businesses typically use departmental accounts?
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